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Federal  Resenre 

JLVJl  VJIJIW  In.  wJ- 


By 

Jim  Jam  Jem^ 


PRICE  $2.00  m  U,  B.  A, 

CAKJRIAOB  PREPAID 


Digitized  by  the  Internet  Archive 

in  2007  with  funding  from 

IVIicrosoft  Corporation 


I 

I  http://www.archive.org/details/federalreservemoOOclarrich 


Federal  Reserve 
Monster 


Jim  Jam  Jems 

BISMARCK,  N.D. 


•    •  •• 
•••  • 


Price  ?2.00  in  U.   S.   A 
Carriage   Prepaid 


COMPILED.  EDITED  AND  PUBLISHED 

Sam  H.  Clark  and  Wallace  CampboU 

Of 

JIMOAM  JEMS 

Bismarck,  North  Dakota 

Copyright  August  1922 


Cjt 


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:x. 


EDITOR'S  FOREWORD. 

ITH  "charity  toward  all  and  malice  to- 
ward none"  we  indite  this  volume  of 
criticism  of  the  Federal  Reserve  "Bunk- 
ing" System  as  it  is  "practiced"  in  America.  We 
are  not  posing  as  a  modern  David,  nor  do  we  un- 
derrate the  size  of  the  giant  we  have  tackled 
herein  by  several  damsights.  And  by  the  same 
token  we  are  not  depending  on  a  single  stone  to 
deliver  a  knockout;  on  the  contrary  we  are  de- 
livering a  veritable  volley  of  rocks  at  the  object 
of  our  criticism  and  we  hope  that  every  chapter 
written  here  will  raise  bruises  and  welts  on  the 
back  and  belly  of  the  critter. 

We  have  no  intention  nor  desire  to  kill.  And 
we  don't  believe  in  reform.  When  a  thing  need_s 
reforming  it  needs  an  axe.  But  what  we  are 
striving  to  do  is  to  awaken  public  sentiment  to 
the  damnable  ramifications  of  the  Federal  Re- 
serve Octopus  in  the  hope  that  the  people  will 
"come  alive"  and  eventually  force  the  Federal  Re- 
serve System  to  be  born  anew. 

It  is  the  abuse  of  the  .Fe_deral-  Reserve  System 
to  which  we  object.     Every  little  while  some 

iii 


50737G 


Foreword 

smart  Alec  mounts  the  bema  and  roars  about  the 
great  good  that  the  Federal  Reserve  System  has 
accomplished.  It  is  called  the  Savior  of  Credit 
and  Industry.  But  it  is  misbranded.  There's  a 
vast  difference  between  the  picture  on  the  toma- 
to can  and  the  contents  of  the  can. 

If  you  have  ever  lived  in  the  West  or  North  or 
in  any  part  of  the  country  where  wild  ducks  or 
partridges  or  prairie  chickens  nest,  you  are  famil- 
iar with  the  antics  of  the  mother  duck  or  prairie 
hen  during  the  hatching  season.  You  have  come 
suddenly  upon  the  mother  of  a  brood  along  the 
roadside  and  as  she  hops  along  there  is  every  in- 
dication that  the  bird  is  wounded  and  she  leads 
you  away  from  her  nest  to  a  point  where  she 
figures  the  young  are  safe  and  then  up  and  away 
she  goes.  These  touters  for  the  Federal  Reserve 
System  remind  us  of  the  mother  duck  and  the 
prairie  hen.  They  flap  along  and  distract  your 
attention  from  the  nest  which  they  are  so  beauti- 
fully feathering;  they  prate  about  '^saving"  and 
"benefiting"  and  flap  you  along  until  you  lose 
sight  of  the  brood  of  evils  that  they  are  really 
mothering. 

Our  object  in  attacking  the  evils  of  the  Federal 
Reserve  System  has  been  to  awaken  sentiment — 
that  is  all.  For  the  past  two  years  we  have  kept 
up  a  continuous  bombardment  against  the  iniqui- 
ties of  the  Federal  Reserve  System  through  the 
monthly  issues  of  Jim  Jam  Jems.    The  demand 

iv 


Foreword 

for  back  numbers  and  extra  copies  has  been  so 
great  that  we  deemed  it  advisable  to  collect  all 
of  these  charges  under  one  volume  and  thus  place 
the  whole  Truth  about  the  Federal  Reserve  Sys- 
tem before  the  people.  What  we  publish  herein 
is  fact,  carefully  compiled  from  the  System's  own 
reports  and  from  public  records.  We  commend 
this  volume  to  all  thinking,  upstanding  Ameri- 
cans who  are  ever  ready  to  fight  for  a  square 
deal. 


ZINC!  VINEGAR!  VITRIOL! 

JIM  JAM  JEMS 

Please  don't  confound  JIM  JAM  JEMS  with 
other  magazines  that  are  aping  it  in  size  and  gen- 
eral appearance.  It  is  not  a  joke  book,  nor  a  dream 
book,  nor  a  slab  of  fiction.  It  is  just  what  it  is  ad- 
vertised to  be — A  Volley  of  Truth. 

You  will  find  more  hard,  frozen-in  facts  and 
facts  that  you  want  to  know  about  matters  of 
public  interest  in  each  issue  of  JIM  JAM  JEMS 
than  you  will  find  in  any  other  publication  in  Amer- 
ica. 

You  cannot  afford  to  miss  a  single  number.  Fill 
in  the  coupon  below  and  send  it  to  us  with  your 
check  for  three  dollars  and  you  will  get  JIM  JAM 
JEMS  for  a  year  delivered  by  mail  to  your  office 
or  home  address. 

Don't  wait!  Join  our  army  of  regulars  with 
the  next  number. 

JIM  JAM  JEMS, 

Bismarck,  N.  Dak. 
Gentlemen : 

Here's  my  check  for  $3.00.  Send  me  JIM  JAM 
JEMS  for  a  year  at  the  following  address : 

Name   

Street 

City    State 


CONTENTS 

Chapter  Page 

I  Federal  Reserve  "Bunking." 1 

II  The  Birth  of  the  Federal  Reserve 

System    4 

III  The  Framework  of  the  Monster  ...     9 

IV  The  Stuffing  of  the  Leviathan  ....   16 

V  Check  Collection  Banditry 21 

VI  The  Loot  of  the  Monster 34 

VII  How  the  Loot  Is  Gathered 40 

VIII  The  Partiality  of  the  Pillage  ....  50 

IX  The  Tragedy  of  Drastic  Deflation  . .  56 

X  The  Palaces  of  the  Monster 68 

XI  The  Monster's  Expenses  75 

XII  What  the   Monster  Does  with  Its 

Loot  83 

XIII  The  Camouflage  of  the  Monster.  . .  86 

XIV  Final  Volley  at  the  Monster 95 


vn 


«  ».* 


Federal  Reserve  "Bunking" 


CHAPTER  I 

THE   FEDERAL    RESERVE  SYSTEM— 
WHAT  IT  REALLY  IS 

^f™3  HE  Federal  Reserve  System  is  the  visible 
^^^^  hand  of  the  Invisible  Empire  picking 
^g^^  the  pockets  of  the  producers  of  real 
wealth.  It  is  the  most  leviathan  parasite  en- 
grafted upon — and  grafting  on — production  in 
the  world's  history.  It  is  an  industrial  vampire 
sucking  industry's  life  blood  down  its  bottomless 
maw.  Its  greed  is  fathomless,  its  rule  is  ruth- 
less and  its  lust  for  power  is  insatiate. 

It  is  openly  and  avowedly  run  and  managed  in 
the  interest  of  a  so-called  "superior  class."  It 
has  a  cynical  contempt  for  the  public — whom  it 
ruthlessly  plunders.  It  believes — and  practices 
the  belief — that  it  was  instituted  for  the  promo- 
tion and  protection  of  superior  privileges;  that 
wealth  is  produced  for  its  exploitation;  that  pro- 
duction of  values  exists  for  its  parasitical  plunder ; 

1 


The  Federal  Reserve  Monster 

that  Shylockery  is  a  virtue  and  that  the  fruits  of 
industry  belong  not  to  its  producers  but  to  its 
despoilers. 

Property-owners,  property-earners  and  proper- 
ty-producers are  but  its  puppets  whom  it  plun- 
ders at  will.  By  monopolizing  and  juggling 
money — the  mere  symbol  of  wealth — it  destroys 
the  value  of  real  wealth.  It  has  but  one  interest 
in  the  public  whom  it  hypocritically  professes  to 
serve  and  that  interest  is  expressed  in  the  query 
"How  much  will  the  people  stand?" 

There  is  nothing  with  which  to  compare  it  for 
it  stands  alone  in  the  world's  history  as  the  most 
gigantic  plunderbund  ever  conceived  in  predaci- 
ty's  womb.  Czardom  at  its  height  and  Kai- 
serdom  at  its  zenith  never  held  a  tithe  of  the  real 
power  held  by  the  Federal  Reserve  System.  It 
is  the  perfected  fruit  and  flower  of  financial  high- 
bindery,  industrial  plunderbund  and  applied  Shy- 
lockery. Under  the  cloak  and  mantle  of  the  law 
ic  reaches  forth  its  paws  of  predacity  and  pouches 
filcheries  which  are  simply  stupendous. 

That  is  briefly  what  the  much  touted  and  sac- 
charinely  adulated  Federal  Reserve  System  really 
is.  Abraham  Lincoln,  the  greatest  human  in- 
tellect which  ever  functioned  on  this  planet, 
prophetically  drew  its  portrait  in  these  words: 

r"It  (the  Civil  War)  has  been  indeed  a  trying 
hour  for  the  Republic;  but  I  see  in  the  near  fu- 
ture a  crisis  approaching  that  unnerves  me  and 


Federal  Reserve  "Bunking" 

causes  me  to  tremble  for  the  safety  of  my  coun- 
try. As  a  result  of  the  war,  corporations  have 
been  enthroned  and  an  era  of  corruption  in  high 
places  will  follow  and  the  money  power  of  the 
country  will  endeavor  to  prolong  its  reign  by 
working  upon  the  prejudices  of  the  people  until 
all  wealth  is  aggregated  in  a  few  hands,  and  the 
Republic  is  destroyed.  I  feel  at  this  moment 
more  anxiety  for  the  safety  of  my  country  than 
ever  before  even  in  the  midst  of  the  war.  God 
grant  that  my  suspicions  may  prove  groundless/^ J 

That  is  the  true  portrait,  drawn  by  a  master 
hand,  of  the  Federal  Reserve  System. 

In  subsequent  chapters  you  will  see  the  birth 
of  the  monster,  its  ruthless  methods  of  plunder, 
its  machinery  of  despoilment,  its  monopoly  of 
money  and  credit,  its  pawnbrokery  and  Shylock- 
ery  and  its  huge  mounds  of  pillage. 

And  in  looking  it  over  don't  overlook  the  fact 
that  you,  you  yourself — whatever  may  be  your 
part  in  American  industry — are  laying  tribute  on 
the  Federal  Reserve  altar  of  Mammon.  You 
can't  escape  its  net  of  pillage.  Amid  its  mounds 
of  gold,  currency  and  securities — the  hugest  ever 
massed  together  on  this  planet — your  contribu- 
tion is  there.  Your  brain  or  your  brawn,  or  both, 
have  added  to  its  lootage.  If  you  live  and  toil 
in  the  U.  S.  A. — in  whatever  capacity — ^your 
"mickle"  adds  to  the  "muckle" — of  its  stored  pil- 
lage. 


CHAPTER  II 

THE  BIRTH   OF  THE  FEDERAL  RESERVE 
SYSTEM 

LICKER  than  an  eel  in  a  bucket  of  soap 
suds"  is  a  fair  description  of  the  accom- 
plished financial  accoucheurs  who 
ushered  this  monster  into  legal  existence.  You 
must  understand  that  the  real  object  was  to  es- 
tablish what  was  in  truth  and  fact  a  Central  Bank 
which  would  dominate  and  control  currency  is- 
sues and  bank  credits  in  the  United  States.  To 
weld  those  chains  upon  American  industry  with- 
out appearing  to  do  it  was  the  object  in  view.  It 
could  be  done  only  by  encasing  dirty  hands  of 
real  pillage  in  the  white  gloves  of  a  "Reserve 
System."  The  Invisible  Empire  must  remain 
invisible.  Visibility  would  defeat  its  object.  The 
Money  Masters  had  read  history  and  knew  that 
the  American  people  stood  four  square  against  a 
Central  Bank.  If  their  monster  of  pillage  were 
called  a  Central  Bank  they  knew  it  would  die  in 
the  legislative  womb. 


Birth  of  Federal  Reserve  System 

Two  such  attempts  had  been  made  and  had  re- 
sulted disastrously  thusly.  The  first  attempt 
was  the  First  United  States  Bank.  It  was  the^ 
child  of  Alexander  Hamilton's  astute  brain.  It 
began  business  on  December  12,  1791.  It  met 
violent  opposition  from  its  birth.  It  was  branded 
as  a  "Money  Trust,"  struggled  along  with  vary- 
ing fortunes  and  finally  died  on  March  3,  1811, 
when  its  charter  expired — with  its  renewal  vainly 
sought.  American  industry  rebelled  at  the  idea 
of  a  Central  Bank  domination.  It  savored  too 
much  of  that  aristocracy  and  oligarchy  whose  / 
chains  they  had  recently  chiseled. 

The  second  attempt  to  engraft  a  Central  Bank 
on  American  industry  was  the  Second  Bank  of 
the  United  States.  It  was  chartered  on  April  10, 
1816,  and  was  a  stormy  petrel  of  finance.  About 
it  waged  a  running  battle.  It  was  from  birth  to 
death  the  center  of  a  conflict.  Against  its  domi- 
nation American  industry  rebelled.  Real  pro- 
ducers of  real  wealth  constantly  fought  this  para- 
site of  finance.  Andrew  Jackson  was  its  bitter 
foe  and  it  went  out  of  existence  during  his  ad- 
ministration "unwept,  unhonored  and  unsung" 
except  in  the  doleful  dirges  of  the  then  Money 
Masters  who  mourned  its  demise.  The  Money 
Masters  of  those  two  eras  read  the  handwriting 
on  the  wall.  American  industry  would  not  en- 
dure a  Central  Bank  and  the  Money  Masters  of 
1914    read    the    same    symbols.      History    was 


The  Federal  Reserve  Monster 

against  them  and  the  genius  of  American  institu- 
tions was  against  them.  Their  idea  of  a  Central 
Bank  had  never  changed.  It  v^as  the  very  core 
and  center  of  their  scheme  to  dominate  American 
industry.  But  to  "get  it  across"  or  to  "put  it 
over"  they  must  re-christen  the  monster.  Twice 
the  people  had  violently  repudiated  the  Central 
Bank  banditry.  Hence  in  the  fertile  brainery  of 
predacity  was  born  the  idea  of  the  Federal  Re- 
serve System — a  camouflage,  a  deception  and  a 
mere  cloak  of  Pecksniffian  hypocrisy.  A  clever 
nation-wide  propaganda  was  at  once  instituted 
with  every  "prop"  put  under  it  that  wily  astute- 
ness could  suggest.  A  subsidized  press  bally- 
hooed,  touted  and  paeanized  the  proposed  Federal 
Reserve  System.  It  was  hailed  as  the  Moses 
which  was  going  to  lead  America  into  the  Prom- 
ised Land  of  industrial  freedom.  It  was  paean- 
ized as  an  absolutely  new  discovery  in  finance — 
when  in  truth  and  in  fact  it  was  one  of  predacity's 
oldest  cards  soiled  in  many  a  game.  But  it  was 
varnished  o'er  and  played  again. 

There  wasn't  to  be  any  "Central  Bank"  you 
understand.  The  sponsors  of  this  monster  ab- 
horred the  idea  of  a  "Central  Bank."  It  was  the 
furthest  possible  from  their  pure  thoughts  of  al- 
truistic finance!  They  were  going  to  have 
twelve  banks,  each  one  established  in  a  center 
of  industry  and  catering  to  and  upbuilding  the 
industries  in  its  regional  zone.     Each  one  was 


Birth  of  Federal  Reserve  System 

going  to  be  a  separate  and  distinct  corporation 
absolutely  disconnected  from  its  eleven  brethren. 
This  idea  was  advertised,  adulated,  and  saccha- 
rinely  paeanized  until  America  was  lulled  to  sleep. 
For  month  after  month  this  cone  of  chloroform 
was  held  over  American  citizens  until  the  anes- 
thetic took  effect.  Then  came  forth  what  was 
known  as  the  Glass-Owen  bill.  The  smoothness  | 
of  its  head  sponsors*  name  was  symbolic.  The 
ground  had  been  prepared  for  its  reception. 
Propaganda  seed  had  been  diligently  sown. 
Years  of  the  most  astute  scheming  and  plotting 
of  the  brainiest  schemers  who  ever  schemed  bore 
its  fruit  in  the  Glass-Owen  bill.  On  rails  greased 
by  years  of  propaganda  it  slid  into  the  legislative 
hopper,  came  through  in  an  oil  bath  and  went  to 
President  Wilson.  Whether  he  was  the  deceived 
or  the  deceiver  none  but  himself  knows.  But  he 
painted  the  Federal  Reserve  System  with  his 
most  magnificent  verbal  rainbow  colors,  prated  of 
it  as  "the  emancipator  of  credit,"  signed  it  in  the 
midst  of  a  coterie  of  sycophantic  Pecksniffs  and 
the  pen  whose  strokes  made  it  a  law  was  relig- 
iously preserved! 

Its  real  authors — who  had  spent  years  in  weav- 
ing its  phrases  and  scores  of  thousands  of  dollars 
in  propagandizing  for  its  passage — winked,  smiled 
in  their  sleeves  and  prepared  for  pillage.  The 
Federal  Reserve  System  was  born  with  a  caul — 
concealing  its  grin  of  greed — and  was  brought 


The  Federal  Reserve  Monster 

into  being  by  the  most  astute  coterie  of  legisla- 
tive accoucheurs  who  ever  delivered  a  babe  of 
legislation. 

Here  and  now^  read  just  two  of  the  sample 
promises  made  by  the  Money  Masters  at  the 
birth  of  their  monster.  They  told  you  that  the 
Federal  Reserve  System  would  "prevent  unfair 
and  undue  constriction  of  credits  with  its  con- 
sequent paralyzing  effect  on  business  and  on  the 
productive  energies  of  the  nation."  They  told 
you  that  "men  will  not  be  thrown  out  of  employ- 
ment wholesale  throughout  the  country  by  the 
fright  of  financial  and  commercial  panic,  but 
finance  and  commerce  will  be  steady.  Hundreds 
and  thousands  of  men  will  not  suddenly  be 
thrown  out  of  employment  during  these  national 
waves  of  depression  nor  undue  feverish  buoyan- 
cy." Peg  these  specious  promises  in  your  brain- 
ery  and  compare  them  later  on  with  the  actual 
performances  of  this  monster  of  depression  with 
the  Federal  Reserve  Board  at  Washington  really 
functioning  ag  a  Central  JBank. 


CHAPTER  III 
THE  FRAMEWORK  OF  THE  MONSTER 

ERE'S  the  idea.  Were  you  one  of  a  co- 
terie of  multi-millionaires  lusting  for  the 
control  of  American  industry  and  finance 
— exclusively  for  pillage — ^you  would,  if  neces- 
sary, join  in  providing  any  amount  of  capital  nec- 
essary to  obtain  the  result.  You  could  afford  to 
provide  it  for  it  would  make  you  one  of  a  coterie 
enabled  to  loot  the  richest  prizes  on  this  planet. 
Any  system  which  could  at  will  open  or  shut 
the  valves  of  American  credit,  stage  an  orgy  of 
"inflation"  or  stage  a  debacle  of  "deflation,"  in- 
crease or  decrease  the  money  supply,  make  the 
tide  of  employment  flow  to  prosperity's  height  or 
ebb  to  despair's  depths,  create  a  "bull"  or  a 
"bear"  market  at  will — would  justify  the  invest- 
ment of  hundreds  of  millions  or  even  billions  of 
capital !  Its  power  would  be  practically  bound- 
less, its  profits  be  fabulous  and  from  its  coign  of 
vantage  it  could  coin  the  sweat  of  scores  of  mil- 
lions of  toilers  into  its  coffers  of  greed. 


The  Federal  Reserve  Monster 

But  if  you  could  do  this  very  same  thing  and 
obtain  precisely  the  same  results  and  reap  exact- 
ly the  same  harvest  in  power  and  pelf  without 
investing  one  thin  dime  or  one  plugged  nickel 
you  wouldn't  put  up  the  money,  would  you? 
That  is  just  exactly  what  these  Federal  Reserve 
highbinders  did  and  this  is  just  exectly  how  they 
did  it.  There  lay  fair  to  their  hands  the  most 
successful  banking  system  in  the  world's  annals 
— the  National  Banks. 

Here  was  the  core  and  center  of  their  pillage. 
Here  was  the  capital  ready  to  their  hands.  They 
proceeded  to  levy  upon,  to  appropriate  and  to 
commandeer  their  capital  from  the  National 
Banks  of  the  United  States.  They  divided  the 
U.  S.  A.  into  twelve  financial  satrapies  or  depen- 
dencies or  loot  areas  with  centers  of  pillage 
thusly :  New  York,  Chicago,  Atlanta,  San  Francis- 
co, Boston,  Minneapolis,  Kansas  City,  St.  Louis, 
Cleveland,  Philadelphia,  Richmond,  and  Dallas. 
Upon  every  National  Bank  in  the  U.  S.  A.  there 
was  levied  a  capital  tribute  of  six  per  cent  of  their 
capital  and  surplus  account  for  subscribed  capi- 
tal to  the  Federal  Reserve  Bank  set  over  them. 
Of  this  amount  one-half  or  three  per  cent  was 
required  to  be  immediately  paid  in  and  the  other 
half  was  held  subject  to  call  if  required. 

Take  a  look  at  this  first  step  on  the  stairway 
of  pillage.  Without  the  investment  of  one  copper 
cent,  of  one  plugged  nickel  or  of  one  thin  dime 

10 


Framework  of  the  Monster 

and  by  one  stroke  of  the  pen  when  this  infamous 
law  was  passed  practically  one  hundred  millions 
of  capital  was  commandeered  into  the  coffers  of 
Federal  Reserve  banditry.  Without  the  risk  of 
one  penny  of  their  own  money  the  Federal  Re- 
serve plunderbund  seized  in  its  talons  of  greed 
the  hugest  banking  capital  in  the  U.  S.  A. — prac- 
tically two  hundred  millions  of  dollars  with  one- 
half  of  it  immediately  payable  and  the  other  half 
subject  to  call!  It  was  the  most  daring  financial 
high-bindery  ever  enacted  on  earth. 

Right  here  don't  hock  your  brains — do  your 
own  thinking.  Without  any  option,  without  any 
vote  of  stockholders,  without  any  action  by  its 
officers  every  National  Bank  in  the  U.  S.  A.  was 
compelled  to  buy  stock'  in  the  Federal  Reserve 
Bank  in  its  fiscal  dependency  or  loot  area  in  which 
it  was  located.  Protest  was  useless — ^just  as  use- 
less as  if  they  stood  under  the  guns  of  a  Jesse 
James*  or  Younger  Brothers'  gang.  It  was  just 
"stand  and  deliver"  and  they  delivered! 

At  this  time,  in  1914,  the  banking  business  in 
the  U.  S.  A.,  and  particularly  National  Banks, 
was  functioning  soundly  and  safely.  It  was  serv- 
ing— not  dominating — industry.  It  was  making 
reasonable — not  Shylock — profits. 

Suppose  the  lustful  eyes  of  the  Federal  Reserve 
lootage  had  turned  to  the  drygoods  instead  of  to 
the  banking  business.  They  would  have  com- 
pelled every  drygoods  merchant  in  the  U.  S.  A. 

11 


The  Federal  Reserve  Monster 

to  contribute  six  per  cent  of  his  capital  and  sur- 
plus— with  one-half  immediately  payable — to 
set  up  a  drygoods  jobbing  house  in  the  center  of 
a  designated  loot  area.  They  would  have  com- 
pelled every  drygoods  merchant  to  purchase  his 
merchandise  from  that  jobbing  house  at  their 
price.  Isn't  one  proposition  as  sane  as  the  other? 
Of  course  it  is.  But  there  is  this  difference.  By 
commandeering  capital  for  the  drygoods  business 
licensed  looters  could  control  only  the  drygoods 
business.  But  by  commandeering  capital  for  the 
banking  business  licensed  looters  could  control  all 
business!  That's  the  difference  and  that's  all  the 
difference.  They  commandeered  capital  where  it 
could  control  not  ofie  industry  but  all  industries. 
They  didn't  commandeer  a  leg  or  an  arm  of  indus- 
try but  they  did  commandeer  the  life  blood  of  all 
industry  and  at  one  leap  vaulted  into  a  seat  of 
power  where  their  scepter's  sway  really  governed 
all  American  industry.  That's  what  they  really 
did. 

What  price  did  Federal  Reserve  lootage  pay 
for  this  commandeered  capital?  It  limited  the 
dividends  to  be  paid  to  these  sandbagged  stock- 
holders to  six  per  cent  per  annum.  No  matter 
how  fabulous  might  be — and  really  have  been — 
the  profits  of  Federal  Reserve  pillage  the  people 
who  provided  its  life  blood  of  capital  must  be 
content  with  a  paltry  six  per  cent  dividend !  Over 
a  long  term  of  years  the  net  profits  of  the  Nation- 

12 


Framework  of  the  Monster 

al  Banks  of  the  U.  S.  A.  have  averaged  slightly 
over  12  per  cent  per  annum.  But  Federal  Re- 
serve lootage  says:  "We  will  pay  you  but  one 
half  what  your  capital  has  been  earning."  Some 
gall?  It  was  the  absolute  acme  of  refrigerated 
nerve!  No  matter  what  Federal  Reserve  Shy- 
lockery  might  make  on  this  commandeered  capi- 
tal the  people  who  provided  it — whose  money  it 
really  was — could  get  but  a  paltry  six  per  cent. 

But  one  fact  or  series  of  facts  is  worth  more 
than  pages  of  language.  So  right  here  and  now 
look  at  the  actual  results  for  the  year  1920.  Here 
is  a  list  of  Federal  Reserve  profits  and  pillage 
for  that  year : 


•Location  Capital 

New   York  $24,618,000 

Chicago  13,213,000 

Atlanta  3,759,000 

San  Francisco  6,412,000 

Boston  7,454,000 

Minneapolis  3,265,000 

Kansas   City  4,295,000 

St.   Louis  4,229,000 

Cleveland  10,070,000 

Philadelphia  8,278,000 

Richmond  4,884,000 

Dallas  3,757,000 

♦The  average  paid  in  capital  for  1920  was  $94,234,000 
and  total  net  earnings  were  $151,408,031.  This  is  160.7% 
profit  and  so  stated  on  pages  153  and  154  of  Federal  Re- 
serve Bulletin  of  February,  1921.  When  the  net  average 
of  the  individual  banks  are  footed  and  averaged  the 
average  is  140.9%.  This  discrepancy  is  for  Federal  Re- 
servists— not  us — to  explain. 
13 


Net  Sand- 

Percent 

baggery 

on  Capital 

Per  Cent 

217 

211 

195 

189 

162 

156 

159 

153 

137 

131 

131 

125 

129 

123 

124 

118 

119 

113 

116 

110 

110 

104 

89 

83 

The  Federal  Reserve  Monster 

Take  all  of  your  reading,  take  all  of  the  history 
of  banking  or  of  finance  since  banks  were  first 
founded  and  see  if  you  can  approximate  any 
such  leviathan  Shylockery.  The  stockholders  in 
National  Banks  who  provided  the  capital  for  this 
orgy  of  profiteering  were  gyped  out  of  all  the  way 
from  211  per  cent  in  the  New  York  satrapy  to 
83  per  cent  in  the  Dallas  satrapy.  For  the  year 
1920  all  over  the  U.  S.  A.  on  the  average  Federal 
Reserve  lootage  took  awjay  from  the  real  pro- 
viders of  its  capital — the  stockholders  in  National 
Banks — better  than  154  per  cent  on  the  money 
they  provided! 

These  records  are  taken  from  the  accounts  of 
its  own  pillage  rendered  by  the  Federal  Reserve 
System  itself. 

You  could  be  quite  some  banker  yourself,  you 
could  orate  and  strut  and  preen  and  propagan- 
dize, you  could  swell  out  your  pouter  pigeon 
breast  at  stage-managed  banquets  and  be  a 
prince  of  high  finance  with  a  limitless  expense 
account  and  with  an  altitudinous  salary — if  you 
could  commandeer  your  neighbor's  money  at  6 
per  cent  and  then  sandbag  out  from  211  to  83 
per  cent  profit  on  it,  couldn't  you? 

Legal?  Of  course  it's  quasi-legal  and  that's  the 
infamy  of  it.  A  coterie  of  the  most  astute  lobby- 
ists who  ever  enchained  a  people's  industry  log- 
rolled through  a  piece  of  legislation  whereby  they 
commandeered  for  their  capital  the  people's  mon- 

14 


Framework  of  the  Monster 

ey  at  a  petty  6  per  cent  and  in  the  year  1920  alone 
pouched  on  it  a  profit  varying  from  211  to  83  per 
cent !  That's  the  record  and  those  are  the  facts — 
hidden  and  concealed  from  you  and  draped  in  a 
mantle  of  silence.  Federal  Reserve  lootage,  Fed- 
eral Reserve  propaganda,  Federal  Reserve  pub- 
licity— all  paid  for  from  your  money — is  too  as- 
tute to  "toot"  anent  this  legalized  sandbaggery. 
Do  you,  the  stockholders  in  the  eight  thousand 
and  odd  National  Banks  in  the  U.  S.  A.,  know 
of  any  reason  why  you  should  provide  at  6  per 
cent  the  capital  for  Federal  Reserve  lootage  on 
which  it  made  in  one  year  alone  from  217  to 
89  per  cent  ?  That  is,  do  you  know  of  any  reason 
except  your  legal  helplessness  and  the  bottomless 
greed  of  Federal  Reserve  sandbaggery?  If  the 
law — cleverly  lobbied  through  your  Congress — 
didn't  compel  you  to  do  it,  would  you  do  it? 
Would  you  of  your  own  free  will  provide  capital 
at  6  per  cent  and  be  gypped  out  of  154  per  cent? 
You  know  you  wouldn't!  Here  is  the  core  and 
center  and  solar  plexus  of  the  whole  Federal  Re- 
serve System — commandeer  capital  at  a  petty 
six  per  cent  and  realize  out  of  it  profits  that 
make  Shylock  look  like  a  philanthropist.  Peg 
this  in  your  brainery  and  look  further. 


15 


CHAPTER  IV 

THE  STUFFING  OF  THE  LEVIATHAN 

OU  have  seen  the  framework  and  skele- 
ton of  the  monster — the  commandeer- 
ing of  the  capital  for  the  operation  of 
the  twelve  Federal  Reserve  Banks  in  each  one 
of  the  satrapies.  You  have  seen  that  the  Federal 
Reserve  oligarchs  not  only  never  put  up  one  thin 
dime  of  their  own  for  the  capital  for  their  System 
but  obtained  that  capital — practically  in  perpetu- 
ity— at  a  paltry  6  per  cent  interest  or  dividend 
charge.  This  capital  would  naturally  fluctuate 
somewhat — but  ever  upward — as  new  National 
Banks  were  commandeered  into  the  jack-pot.  By 
January  1,  1922,  the  paid-in  capital  legally  sand- 
bagged into  the  twelve  regional  Shylockeries  was 
as  follows: 


Boston 

$7,935,500 

New  York 

27,114,000 

Philadelphia 

8,736,500 

Cleveland 

11,134,000 

Richmond 

5,428,500 

Atlanta 

4,189,500 

16 


Stuffing  of  the  Leviathan 


Chicago 

14,307,000 

St.  Louis 

4,603,000 

Minneapolis 

3,569,000 

Kansas  City 

4,570,000 

Dallas 

4,203,000 

San    Francisco 

7,374,500 

Total 

$103,165,000 

This  is  the  assembled  capital  commandeered 
from  National  Banks  in  each  one  of  the  Federal 
Reserve  satrapies.  This  is  the  framework  or 
skeleton  of  the  leviathan.  Observe  now  how 
adroitly  by  another  proyision  of  the  Federal  Re- 
serve legal  grabbery  and  graftery  this  skeleton  is 
stuffed  and  over-stuffed.  A  bank  without  depos- 
itors would  be  like  a  railroad  without  shippers,  a 
store  without  customers,  a  hotel  without  guests 
or  a  doctor  without  patients — a  mere  expense  ac- 
count. But  the  same  astuteness  which  could  com- 
mandeer into  its  maw  over  a  hundred  millions 
of  capital  wouldn't  falter  for  lack  of  deposits — 
you  know  that.  If  the  Federal  Reserve  System 
could — as  it  could — commandeer  capital,  couldn't 
it  commandeer  and  conscript  deposits?  Certainly 
it  could  and  certainly  it  did.  Every  National 
Bank  in  the  United  States  is  compelled  to  carry 
in  the  Federal  Reserve  Bank  in  its  satrapy  or  de- 
pendency a  reserve  account,  i.  e.,  the  amount  of 
money  which  the  law  compels  it  to  carry  in  its 
reserve  against  its  deposit  liabilities.  That  sum 
of  money  is  of  course  enormous  and  at  this  writ- 

17 


The  Federal  Reserve  Monster 

ing  at  the  close  of  business  on  May  10,  1922, 
amounts  to  the  stupendous  sum  of  $1,806,464,- 
000 !  This  is  the  mightiest  mound  of  massed  de- 
posits on  this  planet.  And  every  dollar  of  that 
gigantic  sum  has  been  conscripted  and  comman- 
deered into  the  hands  of  Federal  Reserve  oli- 
garchs— without  the  capital  investment  on  their 
part  of  one  penny  for  its  security!  By  a  few 
strokes  of  a  pen  or  taps  of  a  typewriter  Midas 
was  made  a  piker,  Aladdin's  lamp  was  made  but 
a  tallow  dip  and  Croesus  was  made  a  small  change 
artist.  What  generations  of  toil  and  astute  com- 
mercialism couldn't  accomplish  in  centuries  in 
the  banking  business  adept  Federal  Reserve  oli- 
garchical lobbyists  could  accomplish — ^and  did 
accomplish — by  a  few  pen  strokes!  You  don't 
know  which  to  admire  most — their  supernal  gall 
or  their  astute  lobbying  ability !  But  hang  your 
cap  of  admiration  on  either  horn  of  the  dilemma 
which  you  choose  you  find  the  mightiest  single 
mass  of  money  on  this  planet  swept  into  Federal 
Reserve  coffers  without  toil,  without  effort,  with- 
out one  penny  of  capital  contributed  by  them  and 
without  one  scintilla  of  ability  proven  by  them — 
except  the  ability  of  accomplished  and  astute 
lobbyists ! 

But  did  they  stop  there — after  commandeering 
over  $100,000,000  of  capital  and  after  conscripting 
over  $1,800,000,000  of  deposits?  Little  you  know 
those  birds  if  you  think  it.    After  they  had  got 

18 


Stuffing  of  the  Leviathan 

their  beaks  into  that  capital  and  their  claws 
firmly  fixed  on  those  deposits  they  spread  their 
wings  and  took  a  financial  flight  hitherto  abso- 
lutely untried — even  by  the  boldest  buzzardry  of 
finance.  Here  it  is,  scan  it,  take  a  look  at  it.  For 
generations  of  banking  the  reserve  deposits  of 
banks  have  always  drawn  a  minimum  rate  of  at 
least  2  per  cent  per  annum.  Why?  Because  of 
their  size  and  because  of  their  stability.  Experi- 
ence of  generations  had  demonstrated  the  fairness 
and  the  wisdom  of  that  usage.  Reserve  deposits 
rarely  fluctuate — except  upwards. 

But  at  a  few  strokes  of  a  pen  Federal  Reserve 
oligarchs  reversed  the  custom  of  generations  and 
conscripted  this  tnass  of  deposits — the  largest  on 
earth — into  their  coffers  without  interest!  Tic  a 
towel  about  your  throbbing  brow  so  that  you 
won't  get  dizzy,  seize  your  trusty  pencil  and 
"figger"  a  moment.  You  will  find  that  on  this 
one  item  alone  at  2  per  cent  interest  on  $1,800,- 
000,000  Federal  Reserve  satrapists  and  oligarchs 
and  legalized  tyrants  sweep  just  $36,000,000  a 
year  into  their  profit  pouch.  It's  $36,000,000  a 
year  that  National  Banks  and  their  stockholders 
and  their  depositors  used  to  get  that  they  don't 
get  and  that  Federal  Reserve  predacity  does  get ! 
If  you  and  a  few  hundred  of  your  friends  could, 
by  astute  lobbying  ability,  get  the  titanic  sum 
of  $1,800,000,000  placed  in  your  hands,  practically 
in  perpetuity,  without  interest,  you  could  do  quite 

19 


The  Federal  Reserve  Monster 

a  bit  with  it,  couldn't  you?  You  could,  as  do 
those  Federal  Reserve  oligarchs,  w^ield  the  might- 
iest scepter  of  power  which  ever  ruled  man.  And 
you  could  do  it  with  "other  people's  money" — 
every  penny  of  it — just  as  they  do  and  you  could 
do  it  without  the  investment  of  a  penny  of  your 
own — ^just  as  they  do  it ! 

Here  they  are:  the  Federal  Reserve  Board  at 
Washington,  really  a  Central  Bank,  dominating 
and  domineering  over  the  whole  Federal  Reserve 
System ;  the  twelve  Federal  Reserve  Banks,  each 
one  dominating  and  domineering  over  its  own 
zone  or  regional  satrapy ;  the  commandeered  and 
conscripted  National  Banks  in  each  satrapy  and  fi- 
nally their  stockholders  and  depositors — working 
and  toiling — at  the  base  of  the  pyramid ! 

You  have  seen  the  birth  of  the  Federal  Reserve 
monster,  you  have  seen  the  skeleton  or  frame- 
work of  the  monster  and  you  have  seen  the  stuf- 
fing of  the  monster.  The  Invisible  Empire  were 
the  accomplished  accoucheurs  at  its  Congression- 
al birth;  they  conscripted  the  capital,  the  frame- 
work of  the  monster;  they  commandeered  the 
stuffing,  the  leviathan  deposits,  for  the  monster; 
it  is  in  their  keeping  and  now  what  do  they  do 
with  it,  whom  do  they  "do"  and  how  do  they  do 
it?    Keep  right  on  reading  and  you  will  find  out. 


20 


CHAPTER  V 

CHECK   COLLECTION   BANDITRY 

OU  have  seen  the  birth  of  the  monster; 
you  have  seen  how  it  conscripted  its 
capital  at  a  petty  six  per  cent  interest 
rate ;  you  have  seen  how  it  commandeered — at  no 
interest  rate — the  mightiest  mass  of  deposits  ever 
gathered  together  on  earth  and  you  have  seen 
how  it  did  these  things  by  its  absolute  control 
over  the  money  and  over  the  destinies  of  the 
National  Banks  in  the  United  States.  It  could 
and  it  did  and  it  does  practically  control  their 
affairs. 

But  it  could  not — except  by  intimidation,  by 
oppression  or  by  practical  banditry — control  the 
State  Banks  of  the  United  States.  It  could  not 
legislate  them  into  its  sheep  pen  for  shearing,  but 
it  could  attempt  to  intimidate,  bulldoze  and  ban- 
ditize  them.    This  it  attempted  to  do  in  this  wise : 

One  of  the  chief  specialties  of  this  Federal  Re- 
serve System  of  applied  banditry  is  to  attempt  to 
force  every  bank  in  the  United  States — whether  a 
member    of    its    Shylockery   or    not — to    collect 

21 


The  Federal  Reserve  Monster 

checks  for  its  benefit  and  advantage  for  nothing. 
In  other  words,  where  it  couldn't  conscript  nor 
commandeer — purely  for  its  own  sordid  profit — 
it  proceeded  to  bulldoze. 

There  are  just  two  ways  to  collect  money  on 
checks,  one  by  presenting  them  at  the  counter 
of  the  bank  on  which  they  are  drawn  and  getting 
the  cash  and  the  other  by  sending  them  through 
the  mail  for  remittance  by  draft  drawn  on  some 
large  city  depository.  The  latter  method  ob- 
tains in  99  per  cent  of  the  hundreds  of  millions 
of  checks  drawn.  The  bank  upon  which  the  check 
is  drawn  makes  a  small  charge  of  one  tenth  of  one 
per  cent  to  compensate  for  clerk  hire,  postage, 
stationery  and  the  like.  It  is  a  perfectly  legiti- 
mate charge  in  vogue  and  practiced  for  genera- 
tions in  banking  circles.  But  the  Federal  Reserve 
System,  with  its  customary  greed,  insists  upon 
sandbagging  this  service  for  nothing.  This  arro- 
gant rule — purely  for  its  own  sordid  profit — it 
could  and  did  and  does  enforce  against  its  con- 
scripted and  commandeered  National  Banks. 
But  State  Banks — not  wearing  the  Federal  Re- 
serve yoke  of  bondage — were  at  liberty  to  make 
the  usual  collection  charge  of  one  tenth  of  one 
per  cent.  Thereupon  the  Federal  Reserve  Sys- 
tem had  a  series  of  fits  and  fell  into  them.  From 
an  enormous  number  of  its  banditries  three  typi- 
cal ones  are  selected  for  your  observation — mere- 

22 


Check  Collection  Banditry 

\y  straws  showing  whence  blow  the  most  arrogant 
winds  of  oppression. 

First  take  a  look  at  the  Cones  State  Bank  of 
Pierce,  Nebraska.  "I  don't  want  a  smug  lot  of 
experts  to  sit  down  behind  closed  doors  in  Wash- 
ington and  play  Providence  to  me."  That  is 
what  President  Wilson  said — on  page  60  of  his 
book,  "The  New  Freedom" — before  he,  himself, 
was  sitting  tight  "behind  closed  doors  in  Wash- 
ington." 

That  is  just  exactly  how  Wood  Cones,  presi- 
dent of  the  Cones  State  Bank  of  Pierce,  Nebras- 
ka, feels  about  a  smug  coterie  of  banking  oli- 
garchs known  as  the  Federal  Reserve  Board  at 
Washington  and  the  Federal  Reserve  Bank  at 
Omaha,  Nebraska.  First,  read  the  subjoined  affi- 
davit about  "hard  boiled  and  armed"  Federal  Re- 
serve Bank  agents  and  then  our  comments  on  the 
whole  proposition. 

"In  the  Superior  Court  of  Fulton  County,  Georgia. 

AMERICAN  BANK  &  TRUST  CO.,  et  al. 

vs. 

FEDERAL  RESERVE  BANK,  et  al. 

THE  STATE  OF  NEBRASKA 
PIERCE  COUNTY 

"Personally  appeared  before  the  undersigned  attest- 
ing officer,  Wood  Cones,  who  makes  this  affidavit  to  be 
used  as  evidence  in  the  above  stated  case  and  who  be- 
ing first  duly  sworn  deposes  and  says: 

"That  I  am,  and  for  many  years  have  been,  the  presi- 
dent  of   the   Cones    State   Bank   of   Pierce,   Nebraska, 

23 


[ss. 


The  Federal  Reserve  Monster 

and  as  such  officer  of  said  bank,  I  was  interviewed 
some  time  last  September  by  a  Mr.  Jones,  claiming  to 
represent  the  Omaha  branch  of  the  Federal  Reserve 
Bank  of  Kansas  City,  Missouri.  I  was  urged  by  him 
to  join  the  system.  I  refused  and  was  then  asked  to 
sign  a  card  agreeing  that  my  bank  would  remit  all 
items  at  par  sent  us  by  mail  by  the  Federal  Reserve 
Bank.  I  refused  to  sign  and  was  told  that  I  would  be 
compelled  to  at  an  early  date,  as  there  was  no  limit 
to  the  power  of  the  Federal  Reserve  Bank. 

"Early  in  October  of  the  same  year,  the  local  express 
agent  presented  quite  a  number  of  checks  on  our  bank 
from  the  Federal  Reserve  Bank  and  we  gave  him  a 
draft  for  the  full  amount  payable  to  the  Federal  Re- 
serve Bank.  A  short  time  after,  another  bunch  of 
checks  of  the  same  kind  came  in  the  same  way  but  the 
express  agent  was  instructed  to  collect  in  cash.  I 
offered  him  silver  dollars  for  the  checks  and  he  said 
he  did  not  have  time  to  count  it  and  accepted  an  Oma- 
ha draft  for  the  face  of  the  checks. 

"Following  this,  W.  S.  Lower,  claiming  to  represent 
the  Omaha  branch,  came  with  some  checks  and  de- 
manded legal  tender  in  payment.  We  offered  him  a 
draft  payable  to  the  Federal  Reserve  Bank  but  refused 
to  pay  him  the  currency  without  better  identification 
than  was  produced  by  him.  After  considerable  loud 
talk  and  threat  to  protest  the  checks  he  accepted  a 
draft.  Shortly  after  this  Mr.  Lower  came  again,  prop- 
erly identified,  and  demanded  cash  on  checks  he  had  and 
we  refused  payment  on  account  of  improper  and  in- 
sufficient endorsement.  He  stormed  around  for  a  day 
and  finally  accepted  a  draft  payable  to  the  Federal 
Reserve  Bank. 

"November  14,  1919,  a  high  powered  auto  containing 
lour  people,  drove  into  Pierce  and  stopped  in  front  of 
the  Bank,  but  the  engine  kept  running.    Two  men,  W. 

24 


Check  Collection  Banditry 

S.  Lower  and  M.  L.  Bishop,  got  out  of  the  car,  armed 
with  revolvers  and  entered  our  bank.  As  agents  of 
the  Federal  Reserve  Bank,  they  demanded  the  currency 
on  checks  drawn  against  the  Cones  State  Bank  of 
Pierce,  Nebraska,  of  the  aggregate  face  value  of  $31,- 
900,  some  of  which  had  been  held  for  over  three 
weeks.  While  one  of  our  Bank  force  was  counting 
out  the  money  (about  $13,000  more  than  we  are 
legally  required  to  carry  in  our  vault)  to  Mr.  Bishop, 
Mr.  Lower  told  us  that  Bishop  was  a  United  States 
marshal,  hard  boiled  and  armed,  and  that  he  had 
cleaned  up  the  State  of  Kansas  and  would  get  us  any- 
way, so  we  had  better  sign  up  the  agreement  and  keep 
our  money. 

"Bishop  said  that  a  banker  in  Kansas  who  had  the 
only  bank  in  the  town,  held  out  against  parring,  and 
that  he  told  him  they  would  start  a  National  Bank  and 
drive  him  out  of  business,  and  that  he  personally  was 
instrumental  in  starting  the  National  Bank  and  said 
he  would  stick  to  it  until  he  drove  the  Kansas  bank  out 
entirely. 

"Mr.  Jones  and  a  Mr.  Davis  came  along  later  and 
claimed  they  were  peacemakers  direct  from  the  Fed- 
eral Reserve  Bank  of  Kansas  City.  Said  that  Lower  and 

Bishop  were  fools  and  had  done  entirely  wrong 

at  Pierce  and  advised  us  to  forget  what  Lower  and 
Bishop  had  done  and  sign  up  as  the  day  was  near 
when  we  would  be  forced.  They  took  a  draft  for  the 
checks  they  had  and  departed  saying  that  they  had 
enough  of  this  business. 

"Subsequently  checks  were  sent  through  the  Ex- 
press Company  and  returned  by  the  express  agent 
for  the  reason  as  I  said  that  he  didn't  have  time  to 
count  the  money. 

"Along  about  the  27th  day  of  December,  1919,  a  Mr. 
Farley  came  to   Pierce   from   Kansas   City  and  asked 

25 


The  Federal  Reserve  Monster 

us  to  sign  the  paper  relative  to  parring  checks  or 
join  the  Federal  Reserve  System.  We  refused.  He 
then  stated  that  he  was  instructed  to  stay  in  Pierce 
until  he  had  accomplished  something.  From  that  date 
until  the  day  of  making  this  affidavit  Mr.  Farley  has 
been  here  continuously  and  collects  cash  every  day  on 
checks  sent  him  by  the  Federal  Reserve  Bank. 

"On  January  5,  1920,  a  Mr.  J.  G.  Bryan  came  in  from 
Kansas  City  and  he  and  Mr.  Farley  have  been  instru- 
mental in  trying  to  start  a  National  Bank  at  Pierce, 
devoting  practically  their  entire  time  collecting  cash 
on  checks  sent  by  the  Federal  Reserve  Bank  upon 
banks  in  Pierce  and  promoting  a  National  Bank  that 
they  will  compel  the  banks  of  Pierce  to  join  the  sys- 
tem. Our  customers  report  to  us  that  these  men  have 
told  them  that  we  are  robbing  them  out  of  ten  cents 
on  every  hundred  dollars  of  their  money. 

"On  or  before  the  14th  day  of  January,  1920,  Mr. 
Jones  joined  Mr.  Farley  and  Mr.  Bryan  and  has  acted 
as  Notary  Public,  protesting  checks  presented  by  the 
aforesaid  agents  of  the  Federal  Reserve  Bank  of  Kan- 
sas City,  notwithstanding  such  checks  were  endorsed 
on  the  face  'not  payable  through  the  Federal  Reserve 
Bank,  their  branches  or  agents,  nor  Express  Company 
nor  Postoffice'  and  are  continuing  to  protest  such 
checks  when  we  refuse  payment  of  them  in  their  hands 
and  in  one  case  have  presented  a  check  a  second  time 
and  protested  it  each   time. 

"Every  agent  of  the  Federal  Reserve  Bank  that  has 
been  here  has  advised  us  in  substance  that  they  were 
spending  the  Government's  money  like  drunken  sailors 
and  will  not  stop  at  any  expense  to  force  us  to  join 
the  system. 

"One  of  my  competitors  told  me  that  Mr.  Davis 
told  him  in  substance  that  the  Federal  Reserve  Board 
had  a  steam  roller  on  the  way  from  Washington  to 

26 


Check  Collection  Banditry 

crush  me  personally  and  ruin  my  bank  if  I  persisted 
in  refusal  to  comply  with  their  demands.  I  subse- 
quently called  Mr.  Davis*  attention  to  this  report  and 
he  personally  acknowledged  to  me  that  he  had  made 
such  a  statement  in  substance. 

(Signed)  "Wood  Cones. 

"Sworn  to  and  subscribed  before  me  this  10th  day 
of  February,  1920. 

(Signed)   "Douglas  Cones. 

"Notary  Public  in  and  for  Pierce  County,  Nebraska. 

"My  commission  expires  September  25,  1925." 

The  Cones  State  Bank  couldn't  be  bulldozed, 
banditized  by  gun  play  nor  coerced  into  the  Fed- 
eral Reserve  slaughter  pen.  When  the  Federal 
Reserve  System  grabbed  Wood  Cones  it  grabbed 
a  hot  wire  which  it  finally  dropped,  nursing  its 
badly  burnt  paws! 

Now  take  a  look  at  the  Brookings  State  Bank 
of  Brookings,  Oregon.  It  wouldn't  wear  the  Fed- 
eral Reserve  yoke  of  bondage  and  made  the  cus- 
tomary collection  charge  of  one  tenth  of  one  per 
cent  for  remitting  check  collections.  It  couldn't 
be  bluffed,  bulldozed,  sandbagged  nor  coerced 
and  the  Federal  Reserve  System  had  its  usual  fit. 

On  October  8,  1920,  it  stationed  an  emissary 
from  the  Portland  branch  of  its  San  Francisco 
Shylockery  at  Brookings,  Oregon,  for  the  sole 
purpose  of  collecting  in  cash  over  the  counter  all 
checks  coming  from  all  over  the  U.  S.  A.,  drawn 
on  the  Brookings  State  Bank — with  the  avowed 
object  of  whipping  it  into  abject  surrender.  Noth- 

27 


The  Federal  Reserve  Monster 

ing  doing!  Daily  the  Federal  Reserve  sub-bandit 
presented  himself  at  the  counter  with  his  wad  of 
checks  and  daily  the  Brookings  State  Bank  smil- 
ingly handed  over  the  cash!  The  Federal  Re- 
serve emissary — pursuant  to  orders — stuck  at 
Brookings,  Oregon,  from  October  8,  1920,  until 
October  1,  1921,  vainly  endeavoring  to  wear  down 
the  Brookings  State  Bank.  Positively  nothing 
doing.  The  Federal  Reserve  octopus  had  struck 
at  one  bank  where  its  slimy  tentacle  slipped. 

Then  this  Federal  Reserve  sandbaggery  re- 
sorted to  the  scheme  of  sending  out  what  it  called 
"notices  of  dishonor"  against  the  Brookings  State 
Bank,  whereupon  the  Brookings  State  Bank  went 
into  the  United  States  Court  and  obtained  from 
Judge  Wolverton  an  injunction  against  such  "dis- 
honor notices!"  Drawing  cash  over  its  counter 
for  over  a  year  couldn^t  bluff  the  Brookings  State 
Bank  and  the  United  States  Court  forbade  its 
fictitious  "dishonor  notice"  game!  So  the  octo- 
pus tried  another  method — equally  damphoolish 
but  characteristic  of  its  banditry  methods. 

There  lies  before  us  as  we  write  a  photographic 
copy  of  a  "transit  slip"  made  out  by  the  Federal 
Reserve  Bank  of  San  Francisco  at  its  Los  Ange- 
les Branch  on  November  19,  1921.  On  this  "tran- 
sit slip"  is  listed  a  $50  check  drawn  on  the  Brook- 
ings State  Bank  of  Brookings,  Oregon,  and  over 
against  the  item  is  marked  "Bank  Closed!"  It 
is  as  foul  a  libel  as  even  the  Federal  Reserve  oc- 

28 


Check  Collection  Banditry 

topus  ever  spewed  from  its  sac  of  venom!  The 
Brookings  State  Bank  was  never  "closed"  for 
the  fractional  part  of  a  second !  In  fact  it  was 
and  is  a  damsite  too  "open"  to  suit  the  Federal 
Reserve  thuggery! 

Now  look  at  the  venom  spat  out  by  this  Fed- 
eral Reserve  octopus  at  the  Brookings  State 
Bank  because  it  wouldn't  do  its  bidding.  During 
the  year  it  kept  its  emissary  there  it  collected 
$102,000  in  checks.  Counting  his  salary,  ex- 
penses, expressage  of  currency  and  the  like,  it 
must  have  cost  it  at  least  $4,000.  It  could  have 
had  precisely  the  same  service  for  one  tenth  of 
one  per  cent  or  just  $102. 

Then  when  that  didn't  work  it  sent  out  its 
fictitious  "dishonor  notices"  and  bumped  into  a 
United  States  Court  injunction! 

Then  when  that  didn't  work  it  sent  out  its 
lying  "Bank  Closed"  notice  on  its  "transit  slip !" 
And  it  cowers  behind  the  skirts  of  a  girl  clerk  in 
trying  to  skulk  out  of  this  picture  of  malice.  In 
the  meantime  the  Brookings  State  Bank  held  the 
fort — unshackled  by  Federal  Reserve  oligarchy. 

Now  jump  down  Into  the  Atlanta  Federal  Re- 
serve loot  area  and  take  a  look  at  its  banditry 
there  and  read  what  the  United  States  Supreme 
Court  has  to  say  on  this  whole  thuggery  propo- 
sition. The  method  of  Federal  Reserve  thuggery 
at  this  point  was  to  hold  out  and  hoard  up  a 
mass  of  checks  and  present  them  at  one  time  over 

29 


■  The  Federal  Reserve  Monster 

the  counter  of  the  Atlanta  Bank  and  Trust  Com- 
pany— with  the  avowed  object  of  crippling  it. 
Here  are  quotations  from  the  opinion  of  the  Unit- 
ed States  Supreme  Court  handing  out  a  solar 
plexus  blow  to  this  Federal  Reserve  thuggery. 

"The  plaintiffs  are  not  members  of  the  Federal  Re- 
serve System  and  many  of  them  have  too  small  a 
capital  to  permit  their  joining  it — a  capital  that  could 
not  be  increased  to  the  required  amount  in  the  thinly 
populated  sections  of  the  country  where  they  operate. 
An  important  part  of  the  income  of  these  small  in- 
stitutions is  a  charge  for  the  service  rendered  by  them 
in  paying  checks  drawn  upon  them  at  a  distance  and 
forwarded,  generally  by  other  banks,  through  the  mail. 
The  charge  covers  the  expense  incurred  by  the  paying 
bank  and  a  small  profit.  The  banks  in  the  Federal  Re- 
serve System  are  forbidden  to  make  such  charges  to 
other  banks  in  the  System.  It  is  alleged  that  in  pur- 
suance of  a  policy  accepted  by  the  Federal  Reserve 
Board  the  defendant  bank  has  determined  to  use  its 
power  to  compel  the  plaintiffs  and  others  in  like  situa- 
tion to  become  members  of  the  defendant,  or  at  least 
to  open  a  non-member  clearing  account  with  defen- 
dant, and  thereby  under  the  defendant's  requirements, 
to  make  it  necessary  for  the  plaintiffs  to  maintain  a 
much  larger  reserve  than  in  their  present  condition 
they  need.  This  diminution  of  their  lending  power 
coupled  with  the  lose  of  the  profit  caused  by  the  above 
mentioned  clearing  of  bank  checks  and  drafts  at  par 
will  drive  some  of  the  plaintiffs  out  of  business  and 
diminish  the  income  of  all.  To  accomplish  the  de- 
fendants' wish  they  intend  to  accumulate  checks  upon 
the  country  banks  until  they  reach  a  large  amount  and 
then  to  cause  them  to  be  presented  for  payment  over 
the  counter  or  by  other  devices  detailed  to  require  pay- 

30 


Check  Collection  Banditry 

mcnt  in  cash  in  such  wise  as  to  compel  the  plaintiffs 
to  maintain  so  much  cash  in  their  vaults  as  to  drive 
them  out  of  business  or  force  them,  if  able,  to  submit 
to  defendant's  scheme.  It  is  alleged  that  the  proposed 
conduct  will  deprive  the  plaintiffs  of  their  property 
without  due  process  of  law  contrary  to  the  Fifth 
Amendment  of  the  Constitution  and  that  it  is  ultra 
vires.  The  bill  seeks  an  injunction  against  the  de- 
fendants collecting  checks  except  in  the  usual  way. 

"The  defendants  say  that  the  holder  of  a  check  has 
a  right  to  present  it  to  the  bank  upon  which  it  was 
drawn  for  payment  over  the  counter,  and  that  however 
many  checks  he  may  »hold  he  has  the  same  right  as  to 
all  of  them  and  may  present  them  all  at  once,  what- 
ever his  motive  or  intent.  They  ask  whether  a  mort- 
gagee would  be  prevented  from  foreclosure  because  he 
acted  from  disinterested  malevolence  and  not  from  a 
desire  to  get  his  money.  But  the  word  (right)  is  one 
of  the  most  deceptive  of  pitfalls;  it  is  so  easy  to  slip 
from  a  qualified  meaning  in  the  premise  to  an  un- 
qualified one  in  the  conclusion.  Most  rights  are  qual- 
ified. A  man  has  at  least  as  absolute  a  right  to  give 
his  own  money  as  he  has  to  demand  money  from  a 
party  that  has  made  no  promise  to  him;  yet  if  he  gives 
it  to  induce  another  to  steal  or  murder  the  purpose  of 
the  act  makes  it  a  crime. 

"A  bank  that  receives  deposits  to  be  drawn  upon  by 
check  of  course  authorizes  its  depositors  to  draw 
checks  against  their  accounts  and  holders  of  such 
checks  to  present  them  for  payment.  When  we  think 
of  the  ordinary  case  the  right  of  the  holder  is  so  un- 
impeded that  it  seems  to  us  absolute.  But  looked  at 
from  either  side  it  cannot  be  so.  The  interests  of  busi- 
ness also  are  recognized  as  rights,  protected  against 
injury  to  a  greater  or  less  extent  and  in  case  of  con- 
flict between  the  claims  of  business  on  the   one  side 

31 


The  Federal  Reserve  Monster 

and  of  third  persons  on  the  other  lines  have  to  be 
drawn  that  limit  both.  A  man  has  a  right  to  give 
advice  but  advice  given  for  the  sole  purpose  of  injur- 
ing another's  business  and  effective  on  a  large  scale, 
might  create  a  cause  of  action.  Banks  as  we  know 
them  could  not  exist  if  they  could  not  rely  upon  aver- 
ages and  lend  a  large  part  of  the  money  that  they  re- 
ceive from  their  depositors  on  the  assumption  that 
not  more  than  a  certain  fraction  of  it  will  be  demanded 
on  any  one  day.  If  without  a  word  of  falsehood  but 
acting  from  what  we  have  called  disinterested  malev- 
olence a  man  by  persuasion  should  organize  and 
carry  into  effect  a  run  upon  a  bank  and  ruin  it,  we 
cannot  doubt  that  an  action  would  lie.  A  similar  re- 
sult even  if  less  complete  in  its  effect  is  to  be  expected 
from  the  course  that  the  defendants  are  alleged  to  in- 
tend, and  to  determine  whether  they  are  authorized  to 
follow  that  course  it  is  not  enough  to  refer  to  the  gen- 
eral right  of  a  holder  of  checks  to  present  them  but 
it  is  necessary  to  consider  whether  the  collection  of 
checks  and  presenting  them  in  a  body  for  the  purpose 
of  breaking  down  the  petitioner's  business  as  now  con- 
ducted is  justified  by  the  ulterior  purpose  in  view. 

"If  this  were  a  case  of  competition  in  private  busi- 
ness it  would  be  hard  to  admit  the  justification  of  self 
interest  considering  the  now  current  opinion  as  to 
public  policy  expressed  in  statutes  and  decisions.  But 
this  is  not  a  private  business.  The  policy  'of  the  Fed- 
eral Reserve  Banks  is  governed  by  the  policy  of  the 
United  States  with  regard  to  them  and  to  these  rela- 
tively feeble  competitors.  We  do  not  need  aid  from 
the  debates  upon  the  statute  under  which  the  Reserve 
Banks  exist  to  assume  that  the  United  States  did  not 
intend  by  that  statute  to  sanction  this  sort  of  warfare 
upon  legitimate  creations  of  the  States. 

"Decree   reversed." 

32 


Check  Collection  Banditry 

The  fact  is  that  this  Federal  Reserve  octopus 
in  pursuance  of  its  policy  of  gun  play,  banditry 
and  oppression  against  State  Banks — all  from  the 
dirtiest  motives  of  pure  sordidness — presented 
one  of  its  tentacles  of  greed  to  the  Supreme  Court 
of  the  United  States  and  it  was  ruthlessly  severed ! 
This  is  but  an  introduction — a  mere  curtain  rais- 
er— to  the  greatest  drama  of  greed  ever  enacted 
under  the  guise  of  law  in  a  civilized  land.  But 
here  are  two  things  settled  by  the  highest  tribun- 
al in  the  land;  first,  that  State  Banks  can't  be 
coerced,  banditized  nor  bulldozed  by  the  Federal 
Reserve  System  and  second,  that  the  Federal  Re- 
serve System  "is  not  a  private  business" — but  it 
is  in  fact  the  business  of  the  United  States  and 
"is  governed  by  the  policy  of  the  United  States." 


33 


CHAPTER  VI 

THE  LOOT   OF  THE  MONSTER 

ERE  is  the  proposition.  The  Federal 
Reserve  System  is  the  most  gigantic 
parasite  and  despoiler  of  industry  in 
the  world's  annals!  You  can  search  history 
from  its  first  impression  of  stylus  on  parchment 
to  this  minute  and  you  can  find  nothing  which 
will  approximate  the  bottomless  greed  and  the 
fathomless  lust  for  gold  of  this  monstrous  para- 
site. It  isn't  banking,  it's  banditry.  It  isn't  busi- 
ness, it's  pillage.  The  dirty  paws  of  predacity  are 
encased  in  the  white  gloves  of  offi'cialdom  and 
constantly  dry-cleaned  in  propagandized  hot  air! 
Here  follow  some  of  the  records — every  figure  in 
them  taken  from  official  reports — carefully  con- 
cealed from  your  view  by  the  money  masters  and 
by  their  lackeys  who  fatten  and  batten  on  the 
lootage. 

And  as  you  look  over  this  record  don't  overlook 
this  fact.  No  bank  or  no  system  of  banks  ever 
really  makes  or  produces  one  copper  cent  in  in- 
dustry.   They  take  toll  from  industry.    Banks  are 

34 


The  Loot  of  the  Monster 

a  necessity  to  production  and  to  commerce,  but 
they  should  be  servants,  not  masters.  This  touted 
and  ballyhooed,  propagandized  and  rainbow- 
painted  "emancipator  of  credit"  has  proved  itself 
to  be  the  most  leviathan  industrial  parasite  of 
the  ages.  Here  is  what  they  call  their  "earnings" 
for  the  year  1920.  Filchery  from  industry  bulls- 
eyes  the  proposition. 

For  the  calendar  year  1920  the  gross  "earnings" 
— more  properly  called  filcheries — of  the  twelve 
Federal  Reserve  Banks  reached  the  stupendous 
sum  of  $181,297,338,  as  against  $102,380,583  for 
the  calendar  year  of  1919 !  Quite  some  money  to 
suck  from  the  teat  of  industry,  isn't  it?  The  ex- 
penses for  the  calendar  year  of  1920  were  $29,- 
889,307,  as  against  $20,341,798  for  the  calendar 
year  of  1919 !  Over  nine  million  dollars  more  in 
expense  account  but  over  seventy-eight  million 
dollars  more  in  net  "takings !"  The  net  filcheries 
for  the  calendar  year  1920  was  the  leviathan  sum 
of  $151,408,031,  as  against  $82,038,785  for  the  cal- 
endar year  1919.  Almost  a  two-for-one  shot  and 
every  dollar  of  it  peeled  from  industry's  roll! 
And  incidentally  meditate  on  the  titanic  expense 
accounts  of  these  twelve  tentacles— $29,889,307, 
or  more  than  an  average  of  $2,490,000  apiece  for 
the  year  1920!  Some  luscious  salaries  nesting 
and  nestling  there — to  which  reference  will  here- 
after be  made — aren't  there? 

Here  is  a  list  of  the  twelve  Federal  Reserve 

35 


The  Federal  Reserve  Monster 

Banks  in  the  precise  order  of  their  pillage  with  the 
percentage  of  their  takings  to  their  paid  in  capital 
for  the  year  1920 ! 

Per  cent 

Location  Capital                 on  Capital 

New  York  $24,618,000  217.4 

Chicago  13,213,000  195.6 

Atlanta  3,759,000  162 

San   Francisco  6,412,000  159.1 

Boston  7,454,000  137.3 

Minneapolis  3,265,000  131.5 

Kansas    City  4,295,000  129.3 

St.    Louis  4,229,000  124.3 

Cleveland  10,070,000  119 

Philadelphia  8,278,000  116.8 

Richmond  4,884,000  110.3 

Dallas  3,757,000  89.3 

The  total  capital  employed  was  $94,234,000, 
the  total  net  earnings  $151,408,031,  and  the 
average  percentage  of  profit  taken  on  this  capi- 
tal— after  charging  most  exorbitant  expenses 
— was  160.7  per  cent !  Is  this  a  system  of  banking 
of,  for  and  by  the  people,  is  this  the  "emancipa- 
tion of  credit,"  or  is  it  the  hugest  parasite  ever 
engrafted  and  wrapped  about  a  nation's  industry? 
Compare  this  with  a  savings  bank  rate  of  4  per 
cent  or  compare  it  with  a  high  bank  stock  divi- 
dend rate  of  10  per  cent !  It's  40  times  a  savings 
bank  rate,  it's  16  times  a  high  bank  stock  divi- 
dend rate !  It's  unconscionable,  excessive,  unfair, 
unjust,  and  a  gigantic  burden  on  industry's  over- 
loaded back.     You're  satisfied — and  tickled  pink 

36 


The  Loot  of  the  Monster 

too — to  get  a  safe  8  per  cent  return  on  your  in- 
vestments, but  your  "emancipator  of  credit" 
wolfs  down  20  times  as  much!  Is  this  "credit 
emancipation"  or  is  it  the  sandbagging  of  indus- 
try? Is  this  twenty-to-one  shot  "conserving  the 
nation's  resources"  or  is  it  practicing  the  arts 
of  thuggery  upon  the  real  production  of  real 
wealth?  Is  this  "binding  up  the  nation's  wounds" 
of  finance  or  is  it  blood-letting  to  the  point  of 
exhaustion? 

What  became  of  this  huge  lootage  wrung  from 
America's  brawn  and  brain  for  the  year  1920? 
Here's  where  it  went.  Dividends  to  the  people 
who  provided  the  capital,  i.  e.,  the  scores  of  thou- 
sands of  member  bank  stockholders,  amounted 
to  just  a  pitiful  6  per  cent  or  $5,654,018  out  of 
$151,408,031,  or  about  one-thirtieth  of  the 
amount!  Ought  the  real  providers  of  the  real 
capital,  upon  which  stupendous  profits  were 
made,  to  be  fobbed  off  with  one-thirtieth  of  its 
real  earnings?  Ought  their  money  to  be  com- 
mandeered at  6  per  cent,  profiteered  upon  at  160 
per  cent  and  they  be  practically  sandbagged  out 
of  154  per  cent?  But  it's  the  law,  you  say  I  Of 
course  it's  the  law  and  that's  one  of  the  infamies 
of  the  System !  On  the  one  hand  it  sandbags 
commandeered  investors,  on  the  other  hand  it 
filches  from  industry  and  then  with  both  hands 
this  legalized  parasitism  smugly  pouches  the  pro- 
ceeds into  its  bottomless  bag  of  greed ! 

37 


The  Federal  Reserve  Monster 

These  twelve  octopi  have  a  surplus  account  and 
then  another  receptacle  for  loot  called  a  super- 
surplus  account.  There  was  swept  for  the  year 
1920  into  the  surplus  account  $78,168,287  and  into 
the  super-surplus  account  $6,747,727.  The  re- 
mainder went  as  a  franchise  tax,  so  called,  to 
the  Government.  In  a  subsequent  chapter  you 
will  read  of  this  franchise  tax  chimera. 

The  total  surplus  of  the  twelve  Federal  Reserve 
Banks  at  the  close  of  1920,  after  they  had  sand- 
bagged out  a  profit  of  160.7  per  cent  upon  their 
paid  in  capital  for  that  year,  amounted  to  the  stu- 
pendous total  of  $202,036,367  upon  a  paid  in  capi- 
tal of  $94,234,000  or  214,8  per  cent— accumulated 
in  practically  but  six  years  of  operations ! 

Shylock  was  a  pure  philanthropist,  the  Roth- 
schilds and  J.  P.  Morgan  &  Co.  are  just  alms  giv- 
ers compared  with  these  gigantic  toll  takers  on  in- 
dustry's pike. 

Do  you  know  or  do  you  know  anybody  who 
does  know,  or  have  you  a  friend  who  knov/s  of 
anybody  who  knows  of  any  such  gigantic  bank- 
ing predacity  on  earth?  The  people  through 
their  ownership  of  the  member  banks  in  the  Fed- 
eral Reserve  System  provide  the  capital — com- 
mandeered from  them — for  these  Federal  Reserve 
octopi.  Why  should  they  be  restricted  to  a  6  per 
cent  dividend  when  these  Federal  Reserve  Banks 
"earned''  160  per  cent  or  over  25  times  as  much? 
How  do  you  like  to  have  your  money  comman- 

38 


The  Loot  of  the  Monster 

deered  for  capital  and  get  for  one  year  less  than 
one  dollar  out  of  twenty-five  dollars  made?  Is 
that  "democratizing"  banking  or  is  it  bourbon- 
izing  banking?  Is  that  "emancipating  credit"  or 
is  it  shackling  it  with  you  wearing  the  shackles? 
Can  any  sane  or  honest  man — outside  the  ranks 
of  its  lolling  beneficiaries — defend  any  such  di- 
vision of  profits  as  fair  or  just  or  equitable?  In 
this  banking  the  lamb  (the  people)  and  the  lion 
(the  Federal  Reserve  System)  lie  down  together 
— with  the  lamb  inside  the  lion!  But  you  say 
you're  not  a  stockholder  in  any  of  the  comman- 
deered Banks  of  the  Federal  Reserve  System  and 
aren't  hurt.  Very  well  then.  But  the  chances 
are  that  you  are  a  depositor  in  one  of  those  mem- 
ber banks  and  you  are  furnishing  the  Federal 
Reserve  System  with  a  part  of  its  huge  con- 
scripted reserve  deposits  with  no  interest  paid  on 
them.  If  member  banks  were  getting  the  interest 
they  should  get  from  these  octopi  they  coulJ 
pay  you  more  interest  than  they  do  pay  you. 

The  fact  is  that  the  real  owners  of  the  com- 
mandeered capital  and  of  the  conscripted  de- 
posits get  the  "rind"  only  of  the  huge  "melon" 
when  it's  cut.  The  juicy  interior  of  the  "melon" 
goes  to  the  Federal  Reserve  bureaucrats  and  to 
their  money-masters  who  batten  and  fatten  and 
thrive  on  the  pillagement  of  real  production. 


39 


CHAPTER  VII 

HOW  THE  LOOT  IS  GATHERED 

EASURE  now  the  reservoir  of  liquid 
capital — the  hugest  on  this  planet — 
siphoned  into  the  coffers  of  the  Federal 
Reserve  System.  The  first  pool  comes  from  the 
capital  of  upwards  of  $100,000,000  commandeered 
at  6  per  cent  interest  from  the  member  banks. 
That  is  but  a  little  pond  or  lakelet.  Then  there 
comes  the  ocean  of  money,  over  $1,800,000,000 
conscripted  at  no  per  cent  interest  as  reserve 
deposits  from  the  member  banks.  This  capital 
and  these  deposits— almost  $2,000,000,000— are 
held  practically  in  perpetuity.  It  is  the  hugest 
reservoir  of  liquid  money  on  earth,  it  costs  its 
manipulators  and  managers  and  controllers  not 
one  red  cent  of  their  own  money  and  only  a  petty 
6  per  cent  on  a  petty  $100,000,000  of  the  gigantic 
sum.  In  other  words,  for  an  interest  charge  of 
practically  $6,000,000  a  year  the  Federal  Reserve 
System  gets  the  use  of  practically  $2,000,000,000 
or  $2,000,000,000  at  the  absurd  interest  charge  of 
three-tenths  of  one  per  cent ! 

40 


How  THE  Loot  is  Gathered 

That  is  what  it  really  costs  the  money  masters, 
the  Invisible  Empire  of  the  U.  S.  A.  and  the 
Federal  Reserve  System — three-tenths  of  one  per 
cent — for  the  practical  control  in  perpetuity  of 
the  mightiest  mass  of  liquid  wealth  ever  massed 
on  earth!  Look  at  this  in  cold  blood!  Figure 
what  it  would  mean  to  you  if  you  could  get  the 
use  of  a  petty  $100,000  at  three-tenths  of  one  per 
cent  interest !  Then  figure  what  it  means  to  them 
to  have  the  use  of  20,000  times  $100,000  at  three- 
tenths  of  one  per  cent  interest.  Gives  you  an  at- 
tack of  vertigo,  doesn't  it? 

Member  banks  and  their  stockholders  and  de- 
positors furnish  this  titanic  amount  of  practically 
$2,000,000,000  at  three-tenths  of  one  per  cent  in- 
terest and  then  member  banks  are  graciously  per- 
mitted to  borrow  from  the  Federal  Reserve  Sys- 
tem their  own  money  at  rates  varying  from  six 
to  eighty-seven  and  one-half  per  cent  per  annum. 
Impossible,  you  say?  Not  even  organized  Feder- 
al Reserve  banditry,  not  even  Amalgamated  Shy- 
lockery,  would  have  the  supernal  gall  to  so  sand- 
bag productive  industry? 

Here  are  the  figures  taken  from  the  records  of 
the  Federal  Reserve  Bank  at  Atlanta,  from  the 
records  of  the  Federal  Reserve  Board  at  Wash- 
ington and  from  the  records  of  the  Comptroller 
of  the  Currency  at  Washington.  The  Governor 
of  the  Federal  Reserve  Bank  at  Atlanta,  the  Gov- 
ernor of  the  Federal  Reserve  Board  at  Washing- 

41 


The  Federal  Reserve  Monster 

ton  and  the  Comptroller  of  the  Currency  at  Wash- 
ington— each  of  them  and  all  of  them — are  here- 
by challenged  to  refute  or  question  their  absolute 
correctness  and' authenticity. 
"  In  a  small  town  in  Alabama  was  struggling  a 
small  National  Bank.  Its  capital  was  $25,000 
and  its  surplus  was  $12,500.  It  was  a  compul- 
sory customer  of  the  Federal  Reserve  Super- 
Shylockery  sucking  blood  at  Atlanta,  Georgia. 
Its  money  had  been  commandeered  by  law  to  buy 
stock  in  the  Super-Shylockery.  Its  reserve  de- 
posits had  been  conscripted  by  law  to  feed  pap 
to  the  same  parasite.  It  served  the  cotton  in- 
dustry— the  breath  of  industrial  life  in  its  terri- 
tory. Its  name  is  not  given  because  identification 
might  work  it  great  harm — but  the  Federal  Re- 
serve Oligarchs  know  its  identity.  Don't  you 
ever  doubt  it. 

This  little  National  Bank  in  Alabama  was  in 
the  grip  of  the  Federal  Reserve  Octopus.  It  had 
to  move  the  cotton  crop  in  its  territory.  Farmers, 
planters,  merchants — and  in  short,  all  industry 
in  its  territory  including  its  own  salvation — de- 
pended on  the  moving  and  on  the  marketing  of 
the  cotton  crop.  It  was  "root  hog  or  die"  and 
this  little  bank  rooted  and  was  looted  precisely 
in  this  wise :  It  had  to  borrow  from  the  Federal 
Reserve  Super-Shylockery  at  Atlanta.  It  had  no 
other  house  of  refuge.  It  had  to  borrow  some- 
thing over  $100,000  from  the  Federal   Reserve 

42 


How  THE  Loot  is  Gathered 

Bank  at  Atlanta  and  for  the  week's  period  end- 
ing on  July  31,  1920,  it  was  charged  and  it  paid 
as  high  as  thirty-one  per  cent  per  annum  interest! 
Two  months  later  when  its  loan  reached  as  high 
as  $115,000  it  was  charged  and  it  paid  as  high  as 
eighty-seven  and  one-half  per  cent  per  annum  in- 
terest to  this  subter-human  super-Shylock.  For  the 
two  weeks  ending  on  September  3Q,  1920,  it  was 
borrowing  an  average  of  $115,211.  Two  weeks' 
interest  at  six  per  cent  would  have  been  $288,  but 
the  records  show  that  this  little  bank  paid  the 
Federal  Reserve  Pawnbrokery  at  Atlanta  for  in- 
terest on  that  amount  for  that  time  $2,189 — run- 
ning all  the  way  from  six  to  eighty-seven  and  one- 
half  per  cent  per  annum!  The  actual  average 
time  for  this  loan  for  that  two  weeks'  period  was 
almost  exactly  at  the  rate  of  forty-five  per  cent 
per  annum,  or  at  the  rate  of  $51,884  per  year  for 
the  use  of  $115,211 !  In  about  nine  months  that 
loan  of  $115,211  at  that  rate  would  have  eaten  up 
the  capital  and  surplus  of  that  little  Alabama 
National  Bank.  Was  thajt  banking  or  was  it  pu- 
trid pawnbrokery?  Oughtn't  the  Federal  Reserve 
Bank  at  Atlanta  to  put  the  three  ball  sign  of 
pawnbrokery  over  its  portals? 

And  yet  you  read  subsidized  headlines  sprawled 
athwart  the  columns  of  a  lick-spittle  press  about 
"Agricultural  Interests  Fostered  by  Federal  Re- 
serve Banks"  and  "Farmers  Aided  by  Federal 
Reserve  System"  and  messes  of  the  like  "bull"  and 

A3 


The  Federal  Reserve  Monster 

"bunk"  fed  out  by  paid  press  agents  and  absorbed 
by  a  befooled  people  chained  to  such  pawnbrok- 
ery!  "Aided"  by  a  sandbag!  "Fostered"  by 
pawnbrokery  thuggery!  It's  enough  to  make  a 
"kike"  pawnbroker  sob  and  moan  at  his  soft- 
heartedness.  It's  enough  to  make  Olomon  Sol- 
omon Levi  pull  down  his  three  balls  and  wail  in 
the  Synagogue! 

Later  on  and  for  what  real  reason  no  one  knows 
— except  that  it  wasn't  from  soft-heartedness — 
a  portion  of  the  usurious  loot  was  disgorged  by 
the  Atlanta  Federal  Reserve  pawnbrokery.  That 
isn't  really  interesting.  What  is  really  interest- 
ing is  the  super-supernal  and  subter-brutal  gall 
to  first  extort  it.  Many  a  usurer  when  caught 
and  cornered  has  disgorged  loot — that's  as  old  as 
usury.  Jesse  James'  press  agent  could  boast  of 
as  much.  When  grilled  on  this  interesting  sub- 
ject the  multi-initialed  Governor  Harding  of  the 
Federal  Reserve  Board  chittered  and  chattered 
about  "basic  lines  of  credit"  and  "progressive 
rates  of  interest,"  but  that  doesn't  chlorinate  such 
sandbaggery.  Any  pawnbroker  can  mutter  and 
mumble  such  phrases. 

When  a  bank  has  to  pay  up  to  eighty-seven  and 
a  half  per  cent  interest  you  can  imagine  what  its 
customers  must  pay  it. 

And  at  the  very  time — during  these  very  two 
weeks  ending  September  30, 1920— when  this  little 
Alabama  National  Bank  right  at  the  door  of  real 

44 


How  THE  Loot  is  Gathered 

production  was  being  charged  those  Shylock 
rates  for  a  paltry  loan,  banks  in  New  York  were 
getting  as  high  as  $100,000,000  handed  out  to 
them  at  from  five  to  seven  per  cent.  And  yet  you 
read  about  the  Federal  Reserve  System  "equali- 
zing interest  rates,"  "emancipating  credit"  and 
the  like  bunk!  Why,  it's  enough  to  make  Shy- 
lock  and  Pecksniff  rend  their  cerements  and  jump 
from  their  graves  and  have  another  try  at  ex- 
tortion and  at  applied  hypocrisy.  A  difference 
of  eighty  per  dent  per  annum  between  New  York 
City — where  nothing  but  parasitism  is  grown — 
and  Alabama — where  real  wealth  of  real  cotton 
grows — is  some  difference,  isn't  it?  And  the 
eighty  per  cent  difference  coddles  parasitism  and 
penalizes  production.  This  isn't  the  only  sand- 
baggery  of  extortion  perpetrated  by  the  Federal 
Reserve  oligarchy.  But  it's  a  pretty  good  ex- 
ample, isn't  it? 

Now  take  a  look  at  the  twelve  regional  pawn- 
brokeries  for  the  year  1921  in  the  order  of  their 
pillagements.    Here  they  are : 


Location 

Paid  in  Capital 

Net  Earnings 

Atlanta 

$4,189,500 

131.18% 

Chicago 

14,307,000 

101.31% 

New   York 

27,114,000 

96.23% 

Minneapolis 

3,569,000 

88.21% 

Richmond 

5,428,500 

80.94% 

Kansas    City 

4,570,500 

66.86% 

San  Francisco 

7,374,500 

66.72% 

St.   Louis 

4,603,000 

64.13% 

45 


The  Federal  Reserve  Monster 


Philadelphia 

8,736,500 

61.11% 

Cleveland 

11,134,000 

56.44% 

Boston 

7,935,500 

53.94% 

Dallas 

4,203,000 

38.40% 

Total         Capital  $103,165,000    Average  79.56% 

You  would  expect  to  find — from  the  facts  set 
forth  in  the  first  part  of  this  chapter — that  the 
most  conscienceless  of  these  gentry,  the  Atlanta 
super-Shylockery,  would  show  the  hugest  pile  of 
pillage,  and  it  does!  On  a  paid  in  capital  of 
$4,189,500,  it  vampired  and  blood-sucked  out  a 
net  profit  of  $5,496,000,  or  131.18  per  cent.  What 
the  other  vampires  blood-sucked  out  you  can  read 
from  the  above  table.  You  know  the  net  earn- 
ings made  by  banks  where  you  live.  You  know 
that  a  net  earning  of  12  per  cent  is  a  large  one, 
but  here — in  a  year  of  general  disaster  and  of 
huge  losses — you  have  an  average  net  earning 
for  these  twelve  vampires  of  production  of  79.56 
per  cent  or  over  six  times  the  average  net  earn- 
ings of  National  Banks  for  a  long  term  of  years ! 

Ask  yourself  if  this  enormous  net  earning  per- 
centage, made  out  of  commandeered  capital  and 
out  of  conscripted  deposits,  isn't  outside  the 
realm  of  banking  and  in  the  realm  of  unconscion- 
able vampire  pawnbrokery?  Ask  yourself — in  a 
land  where  pawnbrokers  are  licensed  and  re- 
stricted to  two  to  three  per  cent  a  month  or  34 
to  36  per  cent  per  year — if  79.56  per  cent  per  year 

46 


How  THE  Loot  is  Gathered 

doesn't  brand  such  a  system  as  outrageous  Shy- 
lockery  ? 

But  that  isn't  the  worst  of  it.  Before  making 
these  net  earnings  this  Federal  Reserve  System 
sandbagged  out  an  "expense  account"  of  $36,- 
066,065,  or  an  average  of  $3,005,083  for  each 
regional  pawnbrokery.  The  most  reckless  ex- 
pense squandermaniac  was  the  New  York  sand- 
baggery  with  an  expense  account  of  $8,167,780, 
and  the  most  economical  was  the  Minneapolis 
satrapy  with  an  expense  account  of  $1,325,867. 
In  a  succeeding  chapter  reference  will  be  made  to 
these  expense  orgies.  But  ask  yourself  if,  in  a 
year  of  commercial  disasters  and  of  enforced 
economies,  such  leviathan  expenses  aren't  an  out- 
rage? Ask  yourself  if  such  squandermania — im- 
posed upon  the  producers  of  real  wealth — by 
bureaucratic  pillagement  isn't  alone  and  in  itself 
an  alarm  clock? 

Here  is  a  table  showing  the  location,  the 
capital  and  the  piled  up  pillagements  of  these 
twelve  regional  pawnbrokeries : 


Surplus 

Location 

Paid  in  Capital 

Percentage 

New  York 

$27,114,000 

222 

Atlanta 

4,189,500 

217.6 

Kansas  City 

4,570,500 

211 

Minneapolis 

3,569,000 

209.2 

Boston 

7,935,500 

207.8 

San  Francisco 

7,374,500 

206.2 

Philadelphia 

8,786,600 

206.4 

47 


The  Federal  Reserve  Monster 


St.  Louis 

4,603,000 

204 

Cleveland 

11,134,000 

203.2 

Richmond 

5,428,500 

203.2 

Chicago 

14,307,000 

202.8 

Dallas 

4,203,000 

176 

Total  $103,165,000  Average  209 

Upon  this  capital  (commandeered  at  a  petty 
6  per  cent)  and  from  its  gigantic  deposits  (con- 
scripted at  no  per  cent)  this  super-vampire  Fed- 
eral Reserve  System  has  in  a  few  brief  years — 
after  paying  stupendously  extravagant  expense 
accounts — piled  up  an  accumulated  pillage  of 
$215,523,000.  Do  you  knov^  or  do  you  know  of 
anybody  who  does  know — outside  the  magic  cir- 
cle of  Hebraic  pawnbrokery  pillagement — of  any 
such  banking  pillagement  for  the  years  1914-1921, 
inclusive? 

And  incidentally  these  mazuma  monarchs  have 
$42,231,240  invested  in  the  palatial  emporiums 
where  they  ply  their  traffic  and  gild  their  pills 
of  pillage — to  which  reference  will  later  be  made. 

Why  don't  you  find  these  facts  elsewhere?  Why 
have  they  been  hidden  from  you?  Why  doesn't 
the  "Independent  Press" — about  as  "independent" 
as  a  shackled  slave — blazon  them  forth?  Why 
don't  editors  of  "Fearless  Magazines" — about  as 
"fearless"  as  a  galley  slave  at  the  oars — ring 
the  tocsin  of  alarm?  Learn  why  here  and  now. 
Because  in  plain  Americanese,  they  haven't  the 

48 


How  THE  Loot  is  Gathered 

"guts."  These  Federal  Reserve  money  despots 
have  the  press  of  this  land  "buffaloed"  and  "hog- 
tied" — and  "hog"-tied  is  particularly  right  too. 
Through  their  credit  channels  these  Federal  Re- 
serve despots  have  a  strangle  hold  on  the  banks 
and  on  the  advertisers  of  the  U.  S.  A.  and  the 
banks  and  the  advertisers  have  a  strangle  hold 
on  the  i^ress  and  there  you  are !  Federal  Reserve 
propaganda  tinted  and  tainted  with  the  extract 
of  gold  is  published  by  the  yard.  But  the  real 
facts,  the  interesting  details  of  pillage  are  all 
surrounded  by  Maxim  silencers ! 

The  next  chapter  will  tell  you  of  the  Partiality 
of  the  Pillage. 


49 


CHAPTER  VIII 

THE  PARTIALITY  OF  THE  PILLAGE 

ERE  is  the  idea.  For  reasons  best 
known  to  themselves  Federal  Reserve 
Oligarchs  penalize  production  and  favor 
parasitism.  Who  are  really  entitled  to  the  largest 
loans  from  the  huge  storage  or  reservoir  of  Fed- 
eral Reserve  money?  Why,  the  real  producers 
of  the  real  wealth,  the  agricultural  interests  in 
the  U.  S.  A.  iHave  they  had  it?  They  have  not. 
Look  at  the  figures— official,  please  remember — 
as  of  January  1,  1920,  when  the  Federal  Reserve 
"Drastic  Deflation"  Drama  was  beginning  to  be 
staged. 

At  this  time  the  Federal  Reserve  Bank  of  At- 
lanta was  lending  to  all  its  member  banks  in  the 
States  of  Georgia,  Florida,  Alabama  and  parts  of 
Louisiana,  Tennessee  and  Mississippi  a  total  of 
$88,000,000  and  had  "bought  paper"  to  a  total  of 
$16,000,000— and  that  included  some  $10,000,000 
which  it  was  loaning  to  other  Federal  Reserve 
Banks,  principally  in  the  North  for  speculative 

50 


Partiality  of  the  Pillage 

loans.  Mark  that  down— $94,000,000  of  loans 
covering  that  enormous  area  of  production. 

At  this  same  time  the  Federal  Reserve  Bank  of 
St.  Louis  was  lending  to  all  its  member  banks 
covering  the  greater  part  of  Missouri,  Arkansas 
and  parts  of  Illinois,  Indiana,  Kentucky  and  Mis- 
sissippi $80,000,000  and  had  $31,000,000  of  bought 
paper— including  $20,000,000  taken  from  other 
Federal  Reserve  Banks.  Mark  that  down — $91,- 
000,000  of  loans  in  that  area  of  production. 

At  this  same  time  the  Federal  Reserve  Bank  of 
Kansas  City  was  lending  all  its  member  banks 
in  Kansas,  Nebraska,  parts  of  Missouri,  Oklaho- 
ma, Wyoming  and  Colorado  $88,000,000  and  had 
$17,000,000  of  bought  paper.  Mark  that  down— 
$105,000,000  of  loans  in  that  fertile  area  of  pro- 
duction. 

At  this  same  time  the  Federal  Reserve  Bank 
of  Dallas  was  lending  to  all  its  member  banks 
in  all  of  Texas,  parts  of  Oklahoma,  Louisiana, 
New  Mexico  and  Arizona  $57,000,000  and  had 
$6,000,000  of  bought  paper.  Mark  that  down— 
$63,000,000  of  loans  in  that  vast  area. 

At  this  very  time,  in  January,  1920,  one  huge 
speculative  bank  in  New  York  City  was  borrow- 
ing of  the  New  York  Federal  Reserve  Bank 
$130,000,000!  This  one  New  York  Bank— ca- 
tering to  speculators,  to  money  masters,  to  "cor- 
ner" builders  and  to  "high  financiers,"  not  even 
remotely  connected  with  the  real  production  of 

51 


The  Federal  Reserve  Monster 

real  wealth — was  borrowing  more  money  from 
the  New  York  Federal  Reserve  Bank  than  the 
Federal  Reserve  Bank  of  Atlanta  or  of  St.  Louis 
or  of  Kansas  City  or  of  Dallas  was  lending  to 
their  member  banks  in  their  huge  areas  of  real 
production  of  real  wealth !  And  not  only  that,  but 
at  that  very  time  the  Federal  Reserve  Bank  of 
New  York  was  borrowing  of  other  Federal  Re- 
serve Banks  $100,000,000  to  hurl  into  the  New 
York  maelstrom  of  speculation! 

And  not  only  that,  but  at  that  very  time  all 
the  money  which  all  the  twelve  Federal  Reserve 
Banks  in  the  U.  S.  A.  were  lending  on  agricul- 
tural and  live  stock  paper  to  the  9,000  member 
banks  in  the  48  states  of  the  U.  S.  A.  amounted 
to  the  pitiful  and  piffling  sum  of  but  $51,068,000 
— not  one-half  of  the  amount  borrowed  by  one 
speculative  bank  in  New  York  from  the  New 
York  Federal  Reserve  Bank.  At  that  time  agri- 
cultural interests,  particularly  in  the  South,  and 
live  stock  interests  all  over  the  land  were  be- 
seeching the  Federal  Reserve  Oligarchy  for 
money  and  beseeching  in  vain. 

Take  another  look  at  the  official  figures  for  the 
month  of  November,  1920.  At  this  time  the  real 
producers  of  real  value — in  the  West  and  the 
Northwest  and  in  the  South  and  the  Southwest 
— were  gasping  for  money  and  credit.  Bear  in 
mind  that  their  property,  their  production  and 
their  toil  forms  the  real  foundation  for  the  vast 

52 


Partiality  of  the  Pillage 

superstructure  of  American  wealth.  Where  you 
find  a  lily-fingered  parasite  lolling  in  a  mahogan- 
ized  eyrie  of  splendor  and  gambling  with  money 
— the  tokens  of  production— you  find  a  battalion 
of  real  producers  in  the  great  stretches  of  Amer- 
ica toiling  to  produce  real  values.  If  there 
is  to  be  any  discrimination,  if  there  is  to  be  any 
partiality  shown  by  the  overlords  of  the  Federal 
Reserve  System,  it  ought  to  favor  production  of 
real  wealth,  and  not  parasitism  gambling  with 
its  proceeds.  When  there  was  this  drouth  of 
credit  and  money  where  real  wealth  is  made,  how 
was  the  Federal  Reserve  System  opening  its 
irrigation  gates  of  money?  It  shut  them  in  pro- 
duction's face  and  opened  them  wide  at  parasi- 
tism's demands. 

At  this  very  time — in  the  middle  of  November, 
1920 — one  speculative  bank  in  New  York  borrow- 
ed $134,000,000  from  the  Federal  Reserve  Bank 
in  New  York,  or  $20,000,000  more  than  the  Fed- 
eral Reserve  Bank  of  Kansas  City  was  lending 
to  the  1,091  member  banks  in  the  Tenth  Federal 
Reserve  District. 

Another  speculative  bank  in  New  York  bor- 
rowed from  the  Federal  Reserve  Bank  in  New 
York  $40,000,000  more  than  the  Federal  Reserve 
Bank  in  Minneapolis  was  lending  to  its  1,000 
member  banks  in  Minnesota,  North  Dakota, 
South  Dakota,  Montana  and  part  of  Wisconsin. 


53 


The  Federal  Reserve  Monster 

Another  speculative  bank  in  New  York  bor- 
rowed from  the  New  York  Federal  Reserve  Bank 
$30,000,000  more  than  the  Federal  Reserve  Bank 
of  Dallas  was  lending  all  its  member  banks  in 
all  its  huge  territory. 

Another  speculative  bank  in  New  York  bor- 
rowed from  the  New  York  Federal  Reserve  Bank 
$20,000,000  more  than  the  Federal  Reserve  Bank 
of  Richmond  was  lending  to  all  its  member  banks 
in  the  Fifth  Federal  Reserve  District. 

Massing  these  gigantic  figures  in  another  form, 
the  fact  is  that  at  the  time  four  speculative  banks 
in  New  York  were  borrowing  from  the  New  York 
Federal  Reserve  Bank  an  average  of  $118,000,000 
apiece — or  practically  as  much  money  as  the  Fed- 
eral Reserve  Banks  of  St.  Louis,  Kansas  City, 
Minneapolis,  Dallas  and  Richmond  were  lending 
more  than  4,000  member  banks  in  21  states  com- 
prising more  than  half  the  entire  area  of  the 
United  States! 

If  this  isn't  coddling  parasitism  and  penalizing 
production,  you  find  a  name  for  it! 

Millions  by  the  hundreds  for  parasitical  specu- 
lation, for  the  pounding  down  of  prices  in  "short" 
markets  in  a  "bear"  campaign  waged  against  real 
values  and  millions  by  the  paltry  tens  only  for 
the  real  producers  of  real  wealth  I  If  these  actual 
figures  don't  batter  down  the  "prop"  of  Federal 
Reserve  propaganda  about  "furthering  agricultur- 
al interests,"  nothing  will.    "Furthering  agricul- 

54 


Partiality  of  the  Pillage 

tural  interests"  with  a  bludgeon !  "Equalizing 
credits"  with  a  meter  of  equality  so  stretched  as  to 
enwrap  parasitism !  If  these  actual  figures  don't 
convict  Federal  Reserve  Oligarchy  of  the  height 
of  Pecksniffian  hypocrisy  it's  convict-proof! 
Look  over — and  don't  overlook — these  figures. 
You  can't  consider  them  in  cold  blood  without 
irresistibly  concluding  that  Federal  Reserve  Oli- 
garchy pampers  parasitism,  penalizes  production 
and  bestrews  its  gigantic  resources  by  favoritism 
instead  of  by  merit.  It  is  obsessed  by  a  squan- 
dermaniac  prodigality  for  speculation  and  by  a 
niggardly  parsimony  for  real  production  of  real 
wealth.  It  exalts  the  tokens  of  wealth  and  the 
jugglers  of  it  far,  far  above  its  real  producers- 
It  reaches  out  almost  limitless  largess  to  the  pin- 
nacles of  parasitism  while  practically  starving  the 
real  makers  of  real  wealth  on  whose  shoulders 
parasitism  gaily  rides.  It  shovels  out  hundreds  of 
millions  for  speculation  and  serves  with  an  eye- 
dropper  tens  of  millions  for  production.  It's  un- 
fair, unjust,  inequitable  and  Janus-faced.  It 
mumbles  and  mutters  and  chitters  and  chatters 
and  propagandizes  about  "equalizing  credits"  and 
"emancipating  credit,"  while  in  truth  and  in  fact 
it  is  grossly  discriminating  in  its  credits  and  in- 
stead of  "emancipating"  credit  enchains  it  to  the 
golden  chariot  of  speculative  splendors!  That's 
what  it  really  does  and  that's  the  true  tale  of  its 
Partiality  of  Pillage. 

55 


CHAPTER  IX 

THE  TRAGEDY  OE  DRASTIC  DEFLATION 

OUR  money  masters,  the  Federal  Re- 
serve Board  at  Washington  and  the 
twelve  tentacular  Federal  Reserve 
Banks  in  their  regional  satrapies,  staged  in  1930 
the  greatest  financial  debacle  in  human  history. 
They  w^ere,  and  they  are,  as  much  your  money 
masters,  as  W2is  ever  a  slave-holder  the  master 
of  his  human  chattel.  Your  labor  and  the  prod- 
uce of  your  labor — in  v^hatever  capacity  you 
worked — were,  and  are  today,  as  completely  un- 
der their  control  as  was  ever  the  labor  and  the 
production  of  the  labor  of  slavery  before  Lincoln's 
Emancipation  Proclamation  chiseled  chains.  So 
long  as  you  exist  in  the  U.  S.  A.  and  the  Federal 
Reserve  System  exists,  the  lash  of  these  money 
masters  will  writhe  over  your  back  and  you 
must  cringe  under  its  sting.  Make  no  mistake 
about  that.  No  sceptered  king  nor  bedizened 
kaiser  ever  wielded  a  tithe  of  the  power  which 
rests  in  the  cunning  brains  and  in  the  ruthless 
edicts  of  these  money  masters. 

56 


Tragedy  of  Drastic  Deflation 

Here  are  the  facts.  Read  first  these  quotations 
from  their  own  lips  and  from  their  own  pens 
which  prove  that  these  Federal  Reserve  oli- 
garchs deliberately  staged  the  greatest  financial 
debacle  in  all  human  history.  Nothing  in  human 
history  approaches  it  for  cold-blooded,  wanton, 
ruthless  slaughter  of  values. 

"Credit  must  be  brought  under  effective  con- 
trol." 

"The  Board  (meaning  the  Federal  Reserve 
Board)  will  not  hesitate  to  use  every  statutory 
power  to  regulate  currency  and  credits." 

"Our  present  task  therefore  is  to  proceed  with 
the  deflation  of  credits  as  rapidly  and  as  syste- 
matically as  possible." 

If  for  "deflation"  you  read  "destruction"  you 
get  the  real  intent  and  the  real  meaning  of  these 
ichor-veined  assassinators  of  real  values.  Don't 
let  these  word  jugglers  and  these  money  jugglers 
confuse  you  with  their  lacquered  language.  When 
they  say  "inflation"  what  they  really  mean  is  in- 
crease of  values  and  when  they  say  "deflation" 
what  they  really  mean  is  destruction  of  values. 

The  tragedy  was  staged  in  1920 — about  four- 
teen months  after  the  World  War  was  closed — 
but  it  didn't  get  going  good  and  strong  until  the 
summer  and  fall  of  1920.  After  the  summer  had 
arrived,  after  grain  and  cotton  were  in  the  ground, 
after  cattle  and  sheep  were  on  the  ranges,  after 
merchants'  stocks  were  on  the  shelves,  after  fac- 

57 


The  Federal  Reserve  Monster 

tories  had  run  at  full  capacity  and  after  all  pro- 
ducers and  merchandisers  were  hopelessly  com- 
mitted and  couldn't  retrace  their  footsteps,  the 
lash  fell.  Or  to  change  the  figure  the  trap  wasn't 
sprung  until  every  foot  was  within  its  iron  ring. 
The  first  proof  of  a  murder  is  the  corpse  and 
here  are  the  corpses  of  murdered  values  just  as 
they  were  struck  down  by  the  Federal  Reserve 
bludgeon.    Look  at  them. 


New  Orleans 

1920     No.  3. 

Chicago  Corn 

Middling  Cotton 

January 

1.47 

.40 

May 

1.98 

.40 

June 

1.83 

.40 

July 

1.53 

.39 

August 

1.53 

.33 

September 

1.29 

.27 

October 

.87 

.20 

November 

.80 

.17 

December 

.73 

.14 

1921 

January 

.65 

.14 

February 

.63 

,13 

March 

.61 

.11 

April 

.55 

.11 

May 

.60 

.11 

June 

.60 

.11 

July 

.60 

.11 

August 

.55 

.12 

Here  you  get  from  January,  1920,  to  August, 
1921,  when  these  value  assassinations  culmin- 
ated, a  corn  debacle  of  92  cents  a  bushel  and  a  cot- 

58 


Tragedy  of  Drastic  Deflation 

ton  debacle  of  28  cents  a  pound.  If  you  had 
known  that  this  value  assassination  was  en  route 
and  had  "gone  short"  1,000,000  bushels  of  corn 
you  could  have  robbed  the  corn  growers  of  this 
land  of  $920,000,  couldn't  you  ?  And  some  "high 
financiers"  did  that  very  thing.  If  you  had 
known  that  cotton  was  going  to  shrink  at  least 
28  cents  a  pound  and  had  "gone  short"  10,000 
bales  (500  pounds  to  the  bale)  you  could  have 
robbed  the  cotton  growers  of  this  land  of  $1,400,- 
000,  couldn't  you  ?  And  some  high  financiers  did. 
Take  a  look  at  some  more  value  murders. 


Wheat  No.  2 

Red  Winter 

Wool 

1920 

Chicago 

Ohio  Grades 

January 

2.63 

1.23 

May- 

2.97 

1.16 

June 

2.89 

1.00 

July 

2.80 

.90 

August 

2.47 

.87 

September 

2.40 

.83 

October 

2.20 

.72 

November 

2.05 

.69 

December 

2.01 

.54 

1921 

January 

1.96 

.54 

February 

1.91 

.54 

March 

1.67 

.52 

April 

1.38 

.52 

May 

1.56 

.50 

June 

1.43 

.49 

July 

1.22 

.49 

August 

1.23 

.49 

59 


The  Federal  Reserve  Monster 

A  destruction  of  $1.40  a  bushel  on  wheat  and  of 
74  cents  a  pound  on  wool  ought  to  satisfy  the 
most  murderous  destructionist  of  values,  oughtn't 
it?  You  can  make  your  own  computations  as 
to  the  millions  coteries  of  "bears"  could  make — 
and  doubtless  did  make — out  of  these  value  assas- 
sinations. 

Have  some  more  views  of  values  on  the  tobog- 
gan. 

Penn. 

1920  Steers  at  Chicago    Crude  Oil 

January  15.93  5.06 

May  12.60  6.10 

June  15.03  6.10 

July  15.38  6.10 

Augrust  15.35  6.10 

September  15.25  6.10 

October  14.68  6.10 

November  14.57  6.10 

December  12.09  6.10 
1921 

January  9.84  5.79 

February  9.31  4.18 

March  9.56  3.00 

April  8.71  3.18 

May  8.42  3.35 

June  8.09  2.65 

July  8.40  2.25 

August  8.77  2.25 

When  you  grease  the  toboggan  with  $2.81  a 
barrel  on  oil  and  $7.16  a  hundred  on  steers  you 
can  slide  a  good  many  millions  of  dollars  into  the 

60 


Tragedy  of  Drastic  Deflation 

maws  of  foresighted  ''short  sellers,"  can't  you? 

This  panorama  of  value  murders  could  be  con- 
tinued for  pages  of  tables.  They  all  tell  the  same 
story.  Granulated  sugar  dropped  in  the  same 
time  from  .15  cents  a  pound  to  .05  cents  a 
pound;  copper  ingots  from  .19  cents  a  pound  to 
.11  cents  a  pound;  cotton  yarn  from  72  cents 
a  pound  to  25  cents  a  pound ;  pig  iron  from  $37.75 
per  ton  to  $18.20  per  ton ;  hides  from  40  cents  a 
pound  to  14  cents  a  pound  and  so  on  down  the 
Ime. 

These  are  the  corpses  strewn  all  along  Ameri- 
ca's highways  of  production.  What  was  the 
bludgeon  which  hit  all  these  commodities  on  the 
head  and  drove  them  into  the  pit  of  loss?  It 
was  the  persistent,  wanton,  ruthless  and  cold- 
blooded calling  of  loans  and  refusal  of  bank 
credits  and  contraction  of  currency  by  Federal 
Reserve  oligarchy.  They  said  they'd  do  it  and 
they  did  it — aplenty.  Here  is  the  bludgeon,  look 
at  it. 

Their  total  of  all  loans  and  discounts  including 
"bought  paper"  in  all  of  the  twelve  Federal  Re- 
serve Shylockeries  stood  around  from  $2,700,000,- 
000  to  $3,000,000,000  from  January  to  October, 
1920,  when  the  bludgeon  pounded  hard.  Here  is 
the  bludgeon.    Look  at  it  in  action. 

1920 

October  $3,099,672,000 

November  2,983,103,000 

December  2,974,836,000 

61 


The  Federal  Reserve  Monster 

1921 

January  2,622,174,000 

February  2,500,013,000 

March  2,356,160,000 

April  2,180,178,000 

May  1,995,051,000 

June  1,782,951,000 

July  1,661,036,000 

August  1,527,255,000 

And  from  May  28,  1920,  to  January  25,  1922— 
when  the  slaughtered  were  piled  the  highest — 
the  twelve  Federal  Reserve  Shylockeries  ham- 
mered and  battered  down  their  bank  credits  in 
the  leviathan  sum  of  $2,005,149,000,  or  from  $2,- 
938,031,000  to  $932,000,000  !  And  incidentally  the 
circulation  of  Federal  Reserve  notes  contracted 
in  the  same  period  by  the  stupendous  sum  of 
$923,020,000!  So  that  from  May  28,  1920,  to 
January  25,  1922,  the  Federal  Reserve  oligarchy 
— at  their  will  or  at  their  whim  or  for  hidden  pur- 
poses— contracted  bank  credits  and  currency  by 
the  titanic  total  of  $2,928,169,000,  almost  $3,- 
000,000,000,  almost  3,000  million  dollars.  That 
was  the  pile  driver  battering  your  values  down 
into  the  mire  of  loss. 

Take  now  a  look  at  the  financial  corpses  so 
slaughtered.  Here  they  are.  Look  'em  over  and 
don't  overlook  the  hands  that  killed. them. 

In  1921  there  were  19,625  business  failures  as 
compared  with  6,451  in  1919,  or  an  increase  of 
13,174 — more  than  three  for  one.     And  the  lia- 

62 


Tragedy  of  Drastic  Deflation 

bilities  reached  the  stupendous  total  of  $627,401,- 
000,  an  increase  of  $514,000,000  over  1919,  more 
than  five  for  one.  In  the  so-called  panic  year  of 
1907,  the  high  tide  of  business  failures,  liabilities 
were  only  $_ia2,000,000,  as  against  $627,000,- 
000  in  1921.  Why,  if  1907  was  a  ''panic  year," 
1921  was  a  pandemic  year ! 

And  here  is  another  destruction  meter,  abso- 
lutely infallible — the  suicides.  In  the  first  six 
months  of  1921  there  were  4,527  men  suicides,  as 
against  1,810  for  the  same  period  in  1920;  1,982 
women  as  against  961 ;  214  boys  as  against  88 
and  293  girls  as  against  137 — 7,016  suicides  for 
the  first  six  months  of  1921  as  against  2,996  for 
the  same  period  of  1920.  The  enormous  increase 
in  men  suicides — over  two  and  one-half  for  one — 
tells  its  own  story.  They  came  from  all  classes, 
bankers,  merchants,  farmers,  laborers  and  profes- 
sional men.  None  know  how  many  of  this  enor- 
mous increase,  the  largest  since  statistics  have 
been  kept,  were  driven  to  desperation  and  to 
death  from  hunger,  from  unemployment,  from 
the  loss  of  life's  toil  or  from  the  failure  of  enter- 
prises in  which  they  had  spent  their  lives.  No 
statistics  can  summarize  human  emotions,  but 
they  can  tell  and  they  do  tell  of  the  greatest  holo- 
caust of  su'*'^ides  ever  ravaging  this  land — un- 
doubtedly due  to  industrial  tragedies  staged  by 
the  cold  blooded  butchery  of  production.  This 
much  is  certain.     Never  before  in  a  given  time 

63 


The  Federal  Reserve  Monster 

in  this  land  has  there  been  such  a  holocaust  of 
failures,  of  suicides  and  of  unemployment.  Never 
before  in  this  land  were  such  sacrifices  laid  on 
the  twin  altars  of  Moloch  and  of  Mammon.  And 
they  precisely  correspond  in  time  with  the  Trag- 
edy of  Drastic  Deflation! 

During  all  this  time  and  particularly  beginning 
with  the  late  summer  and  early  fall  of  1920,  in- 
dividuals, associations,  committees  and  organi- 
zations representing  farmers,  planters,  cattle- 
men, manufacturers,  bankers  and  merchants — in 
short,  representatives  of  all  industries — were  en- 
treating and  beseeching  Governor  Harding  of 
the  Federal  Reserve  Board  and  his  associates 
to  be  more  mild  and  more  lenient  and  more 
reasonable  in  their  drastic  tragedy  of  destruction. 
They  might  as  well  have  besought  a  cyclone  or 
entreated  a  tornado  or  prayed  to  an  earthquake. 
Cold-bloodedly,  relentlessly  and  wantonly  loans 
were  called,  extensions  were  refused,  renewals 
were  tabooed  and  bank  credit  put  on  the  chop- 
ping block.  The  very  people  whose  toil  and 
whose  labor  and  whose  real  wealth  were  build- 
ing the  magnificent  palaces  wherein  these  Shy- 
lockeries  were  housed  and  were  paying  the  ex- 
orbitant salaries  of  these  money  despots  were  be- 
ing ruined  by  their  servants!  The  Federal  Re- 
serve System  at  that  very  time  had  a  loaning 
ability  of  over  $2,000,000,000  more  than  it  then 
used  and  not  only  wouldn't  use  it,  but  contracted 

64 


Tragedy  of  Drastic  Deflation 

its  loans  by  $2,005,149,000  and  currency  by  over 
$932,000,000.  Instead  of  aiding  production,  it 
throttled  it.  And  instead  of  aiding  the  producers 
of  commodities  to  carry  thetn  it  forced  producers 
to  market  them  at  most  ruinous  losses !  Instead 
of  dropping  the  curtain  on  this  Tragedy  of  Dras- 
tic Destruction,  it  ran  it  to  its  close!  It  staged 
the  greatest  debacle  of  blasted  credit,  number 
of  failures,  magnitude  of  liabilities,  suicides  and 
unemployment  ever  witnessed  in  this  land.  It 
did  it  deliberately,  ruthlessly  and  as  per  program 
too. 

Go  back  over  these  figures,  all  taken  from  offi- 
cial records — all  undenied  and  undeniable — and 
ask  yourself  if  ever  before  in  human  history  the 
industries  and  credit  of  a  successful  nation  and 
successful  in  the  greatest  War  ever  waged,  too, 
were  so  butchered?  These  figures  indict  and  con- 
vict the  Federal  Reserve  System,  as  it  has  been 
maladministered,  as  the  arch  betrayer  of  a  peo- 
ple's trust.  It  indicts  and  convicts  them  as  jug- 
gling with  the  symbols  of  value  to  the  destruction 
of  real  values.  No  sane  man  can  read  this  record, 
frozen  into  Government  statistics,  and  defend  the 
oligarchs  who  made  it.  It  never  was  ''deflation." 
That  is  just  a  sonorous  euphemism  to  disguise 
sandbaggery.  It  was  destruction  to  scores  of 
thousands  and  to  hundreds  of  thousands  of  the 
real  producers  of  real  wealth.  Billions  of  dollars 
of  real  values  were  annihilated,  not  by  the  trend 

65 


The  Federal  Reserve  Monster 

of  the  markets,  but  by  artificial  "bear"  markets 
artificially  created  by  the  throttling  of  credit. 
You  can't  withdraw  literally  billions  of  credit 
and  currency — almost  three  billions  of  them — the 
very  life-blood  of  commerce  from  industry  and 
have  it  thrive  any  more  than  you  can  tap  a  man's 
jugular  vein  and  have  him  live !  That's  what 
really  happened  in  this  Tragedy  of  Drastic  De- 
struction. 

And  upon  whom  did  this  Tragedy  bear  the 
hardest?  Upon  those  least  able  to  endure  its  fear- 
ful pressure — the  farmers.  Bear  in  mind  that 
farming  is  not  only  the  largest  industry  in  the 
U.  S.  A.,  but  it  is  the  only  absolutely  basic  in- 
dustry— the  keystone  upon  which  rests  the  en- 
tire industrial  superstructure. 

Here  is  what  this  Tragedy  of  Drastic  Deflation 
did  to  the  farmer  as  measured  for  the  years  of 
1919,  1920  and  1921. 

Value  in  1919  $13,500,000,000 
Value  in  1920  9,000,000,000 
Value  in  1921         5,675,000,000 

In  each  of  these  years  there  was  practically  the 
same  acreage  under  cultivation,  350,000,000  acres. 
In  1919,  farm  products  were  worth  $39  per  acre, 
in  1920,  $26  per  acre  and  in  1921,  $16  per  acre. 
Here  is  where  the  Federal  Reserve  credit  crusher 
pulpified  the  finest — at  the  very  foundation  of  all 
industry!  The  production  of  these  basic  farm 
products — the  real  foundation  of  all  this  Federal 

66 


Tragedy  of  Drastic  Deflation 

Reserve  splendor — was  practically  the  same  in 
volume  for  these  three  years,  but  the  Federal  Re- 
serve credit  crusher  crushed  it  from  $39  to  $26 
to-$16  per  acre  measured  by  its  purchasing  value ! 
That's  the  Tragedy  of  Drastic  Deflation  in  its 
final  analysis  battering  down  the  money  value  of 
America's  basic  industry  almost  two-thirds !  But 
the  profits  of  the  Federal  Reserve  System — and 
its  exorbitant  expense  account  and  its  lavish 
salary  rolls — kept  off  the  toboggan  down  which 
slid  all  the  others! 


67 


CHAPTER  X 
THE  PALACES   OF  TH'E   MONSTER 


BT^^S  EDERAL  Reserve  Oligarchy  houses  it- 
g^^^  self  most  palatially.  There  is  nothing 
Pr^gB^  in  Government  annals  or  in  corporate 
prodigality  private  or  public  to  anywhere  ap- 
proximate the  absolute  squandermania  of  Federal. 
Reserve  obsession  for  luxurious  quarters. 

If  you  want  in  your  city  a  Post  Office  Building, 
a  Federal  Court  Building  or  a  Custom  House 
Building  you  must  lobby  and  beseech  and  peti- 
tion and  "trade"  and  pull  wires  in  Congress  un- 
til you  do — or  don't — get  it.  But  it's  different 
with  Federal  Reserve  satraps.  By  merely  a 
Federal  Reserve  ukase  or  decree  or  resolution  or 
order  an  Aladdin's  Palace  arises  like  magic — paid 
for  by  your  money.  No  such  squandermaniac  ob- 
session has  ever  before  been  seen  in  this  country 
in  prodigality  of  buildings,  in  luxuriance  of  equip- 
ment or  in  splendor  of  quarters.  And  not  only 
that,  but  the  speed  with  which  enormous  sums 
have  been  "charged  off"  from  building  accounts 

68 


Palaces  of  the  Monster 

is  absolutely  appalling.     Take  a  look  at  some  of 
the  items  of  this  profligacy. 

The  Philadelphia  Federal  Reserve  Bank  bought 
a  building  for  $600,000  and  spent  in  "remodeling" 
it  $1,099,638,  making  a  total  cost  to  September  30, 
1921,  of  $1,699,638,  and  then  "charged  off"  to 
"depreciation  allowance"  the  enormous  sum  of 
$1,166,848!  In  other  words,  after  spending  $1,- 
099,638  in  "remodeling"  its  building  it  "charges 
off"  for  "depreciation"  $1,166,848,  or  $67,210  more 
than  it  cost  to  "remodel"  it !  So  that  after  spend- 
ing $1,099,638  on  "remodeling"  the  whole  proper- 
ty is  worth  only  $532,790,  or  $67,210  less  than 
it  cost  before  "remodeling."  Either  Philadel- 
phia real  estate  depreciates  with  lightning-like 
rapidity  or  Federal  Reserve  judgment  isn't  worth 
a  picayune  or  this  huge  "charge  out"  for  "de- 
preciation" is  a  mere  camouflage  or  deception. 
Take  your  choice.  It's  either  damphoolishness  or 
incompetency's  height  of  deception.  And  that's 
all  you  can  make  it. 

The  San  Francisco  Federal  Reserve  Bank  spent 
originally  in  "original  investment"  for  a  build- 
ing $520,785,  spent  $232,895  for  "remodeling," 
spent  $448,776  for  "new  building"  operations, 
making  a  total  cost  to  September  30,  1921,  of 
$1,202,456  and  then  "charged  off"  for  "deprecia- 
tion allowance"  $530,795,  so  that  after  spending 
$681,671  on  "remodeling"  and  new  buildings  on 
an  original  purchase  of  $520,785,  it  emerges  with 

69 


The  Federal  Reserve  Monster 

a  value  of  but  $671,661 !  Or  in  other  words,  after 
spending  $681,671  on  a  $520,785  purchase  it 
claims  the  gross  value  to  be  but  $671,661,  or  but 
$150,876  more  than  the  original  purchase!  Or 
in  other  words,  it  got  but  $150,876  of  value  for  an 
expenditure  of  $681,671!  Does  San  Francisco 
real  estate  depreciate  as  fast  as  that,  or  are  Fed- 
eral Reserve  business  oligarchs  futile  wastrels,  or 
is  this  method  of  accountancy  just  a  camouflage? 
Figure  it  out  for  yourself. 

The  St.  Louis  Federal  Reserve  Bank  made  an 
"original  investment"  in  building  of  $1,311,197, 
spent  $560  on  "remodeling"  and  "charged  off" 
$685,000  for  "depreciation  allowance,"  emerging 
with  a  value  of  $626,575  for  an  expenditure  of 
$1,311,757!  Another  case  of  swift  shrinkage  in 
value  or  wastrelcy  in  expenditure  or  camouflage 
in  accountancy.    Figure  it  to  suit  yourself. 

The  New  York  Federal  Reserve  Bank  paid  $4,- 
797,882  for  its  site,  spent  up  to  September  30, 
1921,  $758,072  on  building  operations,  making  a 
total  expenditure  of  $5,555,954  and  immediately 
charged  off  to  "depreciation"  the  enormous  sum 
of  $1,841,618 !  Did  it  pay  too  much  for  its  site  or 
does  real  estate  in  the  heart  of  the  greatest  city 
on  earth  depreciate  almost  40  per  cent  almost 
immediately  after  purchase?  Figure  it  for  your- 
self. Later  on  reference  will  be  made  to  this 
New  York  oligarchical  palace  of  splendor. 


70 


Palaces  of  the  Monster 

Up  to  September  30,  1921,  Federal  Reserve 
satrapists  had  spent  $36,158,056  on  its  twelve 
building  operations  and  had  "charged  off"  as  "de- 
preciation allowance"  the  gigantic  sum  of  $6,684,- 
213 !  In  other  words,  in  a  very  few  years,  and  in 
most  cases  practically  at  once,  it  depreciated  its 
own  building  accounts  by  about  eighteen  per 
cent! 

Incidentally  up  to  the  same  date  it  had  spent 
$3,212,349  on  its  Branch  Bank  buildings  and  had 
depreciated  them  by  $346,369.  In  its  Helena 
Branch  it  made  an  "original  investment"  of  $15,- 
000,  blew  in  $161,438  on  the  purchase  and  then 
"charged  off"  for  "depreciation  allowance"  $77,- 
738  when  it  got  through,  or  about  45  per  cent 
on  the  whole  transaction. 

Up  to  September  30,  1921,  Federal  Reservists, 
including  branch  banks,  had  "reserved"  $39,370,- 
405  of  your  money  in  building  operations  and  had 
them  "depreciated"  by  the  enormous  sum  of  $7,- 
030,582,  or  about  18  per  cent,  almost  immediately. 
You  are  entitled  to  draw  your  own  conclusions  as 
to  the  necessity  for  these  palaces,  for  the  splendor 
of  their  equipment  and  for  the  real  motive  of  so 
speedily  "charging  off"  such  enormous  sums  for 
"depreciation  allowance."  You  are  entitled  to 
draw  your  own  conclusions  as  to  the  wisdom  of 
allowing  a  coterie  of  bureaucrats  to  spend  such 
huge  sums  for  their  personal  comfort  or  conveni- 
ence or  splendor  unsupervised  and  unhindered. 

71 


The  Federal  Reserve  Monster 

You  are  entitled  to  ponder  on  the  proposition  that 
these  huge  expenditures  aren't  obtained  by  legis- 
lation from  Congress,  but  are  made  to  suit  the 
whim  or  ambition  or  convenience  or  extravagant 
ideas  of  an  appointive  body. 

The  New  York  Federal  Reserve  Bank  in  cost, 
in  expenditure,  in  equipment,  in  splendors  purely 
for  the  convenience  of  its  occupants  is  intended 
to  surpass  any  like  building  on  earth.  Its  cost 
has  been  estimated  at  from  $17,000,000  to  $20,- 
000,000.  Its  corner  stone — amid  speeches  and 
plutocratic  glorifications — was  laid  on  May  31, 
1922.  The  fees  of  architects  and  engineers  alone 
amounted  to  the  stupendous  sum  of  $1,106,000. 
It  is  intended  to  house  5,000  employees — about 
2,500  more  than  it  now  has. 

Make  right  here  some  comparisons. 

In  the  first  week  of  May,  1922,  the  loans  and 
discounts  of  the  New  York  Federal  Reserve  Bank 
^^amounted  to  $89,956,248,  and  it  must  have  a 
$17,000,000  building  and  equipment  to  handle  its 
activities.  On  the  same  date  the  loans  and  dis- 
counts of  the  National  City  Bank  of  New  York 
amounted  to  $506,840,494,  and  its  bank  buildings 
to  but  $6,060,000.  On  the  same  date  the  loans 
and  discounts  of  the  National  Bank  of  Commerce 
of  New  York  amounted  to  $259,165,930,  and  its 
bank  building  to  but  $4,000,000.  Figure  it  for 
yourself.  It  makes  some  difference  whose  money 
is  being  spent,  doesn't  it?  Private  business  is  one 

72 


Palaces  of  the  Monster 

thing,  and  public  business  is  another  thing,  when 
it  comes  to  housing  it,  isn't  it?  Compare  the  vol- 
ume of  the  loans  of  these  banks,  compare  their 
building  costs  and  draw  your  own  conclusions. 

In  addition  to  veined  marble  and  polished  brass 
and  in  addition  to  a  mass  of  luxurious  equipment 
the  New  York  Federal  Reserve  Bank  has,  or  will 
have  on  completion,  a  beautiful  auditorium,  a 
gymnasium,  a  club  room  for  men,  a  club  room 
for  women,  and  a  restaurant. 

It  will  doubtless  gratify  farmers  on  the  prairies, 
workmen  all  over  the  land,  merchants,  and  manu- 
facturers and  professional  men  to  know  that 
their  toil,  their  efforts  and  their  earnings  are  in 
effect  being  levied  upon  to  provide  this  modern 
palace  equipped  with  an  auditorium,  a  gymna- 
sium, two  clubs  and  a  restaurant. 

It  will  doubtless  gratify  the  stockholders  in 
National  Banks,  whose  money  is  commandeered 
to  capitalize  this  leviathan,  to  know  that  their 
money,  or  its  proceeds,  or  its  earnings,  is  being 
used  to  erect  and  equip  a  veritable  Temple  of 
Mammon  with  all  these  attendant  luxuries — 
which  they  themselves  cannot  afford  in  their 
places  of  business! 

If  you,  who  read  these  lines,  could  commandeer 
over  a  hundred  millions  of  dollars  for  capital  at 
6  per  cent  and  could  conscript  over  $1,800,000,000 
of  deposits  at  no  per  cent  you  could  transact 
your  business  in  a  palace  in  the  heart  of  New 


The  Federal  Reserve  Monster 

York  with  an  auditorium  and  club  rooms  and  a 
gymnasium  and  a  restaurant,  couldn't  you?  But 
as  you  can't  commandeer  your  neighbor's  capital 
nor  conscript  for  nothing  the  deposits  of  the  pub- 
lic, you  find  yourselves  compelled  to  work  and 
to  provide  the  wherewithal  for  those  who  can! 

You  can  measure  these  lavish  expenditures  for 
buildings  and  equipments  and  luxuries  by  any 
known  measure,  by  volume  of  business,  or  by 
like  buildings  for  like  purposes  and  it  is  as  clear 
as  day  that  these  Federal  Reserve  Palaces  are  a 
monument  of  needless  extravagance  and  of  wan- 
ton wastage — pulled  off  by  the  ukas^  of  en- 
throned; bureaucracy  spending  "other  people's 
money!"  That's  all  you  can  make  of  the  Mon- 
ster's Palaces. 


74 


CHAPTER  XI 

THE  MONSTER'S  EXPENSES 

OU  ARE  going  now  to  look  over — and 
not  overlook — the  most  stupendous, 
wasteful  and  exorbitant  bank  expense 
account  ever  entered  on  bank  ledgers  on  this 
earth.  You  are  going  to  look  at  the  details  of 
an  expense  account  where  the  items  run  by  mil- 
lions, where  expenses  have  no  legal  limit  and 
where  they  are  incurred,  paid  and  audited  with- 
out any  supervisory  authority.  You  are  going 
to  gaze  at  an  expense  account  where  the  "sky 
is  the  limit." 

Take  first  a  look  at  the  New  York  Federal  Re- 
serve Bank's  expense  account.  That  one  is  the 
most  arrogant,  wasteful  and  prodigal  of  all  the 
twelve  regional  satrapies. 

In  1917  the  entire  salary  and  wages  account  of 
the  New  York  Federal  Reserve  Bank  was  $970,- 
580  and  their  total  loans  and  discounts  were 
$399,078,000.  Mark  that  down— salaries  and 
wages  of  $970,580  and  loans  and  discounts  (which 
really  measure  the  business  of  a  bank)   of  $399,- 

75 


The  Federal  Reserve  Monster 

078,000,  or  $1  of  expense  to  every  $413  of  loans 
and  discounts. 

On  January  25,  1922,  the  salary  and  wages  ac- 
count of  the  New  York  Federal  Reserve  Bank  was 
$4,988,703,  with  loans  and  discounts  of  $146,526,- 
938,  or  $1  of  expense  to  every  $29  of  loans  and  dis- 
counts ! 

Ask  any  practical  banker,  any  administrative 
business  man,  any  expert  accountant  or  any  effi- 
cient expert  if  it  is  possible  to  justify  any  such 
expense  ratio.  One  to  four  hundred  and  thirteen 
in  1917  and  one  to  twenty-nine  in  1921 — fourteen 
to  one  raise  I 

In  1917  there  were  12  officers  of  that  bank  to 
administer  loans  of  $399,078,000.  In  1921  there 
were  40  officers  of  that  bank  to  administer  loans 
of  $146,526,938.  In  other  words,  you  get  28  more 
officers  to  administer  a  business  shrunken  down 
over  sixty  per  cent !  In  other  words,  you  get  over 
a  two  hundred  per  cent  increase  in  officers  to  ad- 
minister a  sixty  per  cent  business  shrinkage ! 

And  now  incidentally  the  pay  of  those  40  offi- 
cers—administering a  sixty  per  cent  shrunken 
business — amounted  to  more  money  than  the 
salaries  of  the  President  of  the  United  States,  the 
Vice  President  of  the  United  States,  half  the 
United  States  Senate  and  the  Governors  of  twelve 
American  States  besides !  If  that  isn't  bottomless 
bureaucratic  greed  expressed  mathematically,  you 
express  it  yourself! 

1(i 


The  Monster's  Expenses 

Look  further  into  the  depths  of  this  golden 
pool  of  New  York  Federal  Reserve  expense  plun- 
derbund.  You  are  helping  pay  it  and  you  are 
entitled  to  scrutinize  the  salary  items.  Take 
'em  as  they  come. 

J.  Crane  entered  the  bank  at  a  yearly  salary  of 
$1,080  as  manager  foreign  department  and  now 
receives  a  yearly  salary  of  $7,500,  or  an  increase 
of  594  per  cent. 

A.  J.  Lins,  manager  at  large,  entered  the  bank 
at  a  yearly  salary  of  $1,500  and  now  receives  a 
yearly  salary  of  $10,000  or  an  increase  of  566 
per  cent. 

John  Raasch,  manager  supply  department,  en- 
tered the  bank  at  a  yearly  salary  of  $1,000  and 
now  receives  a  yearly  salary  of  $6,000,  or  an  in- 
crease of  500  per  cent. 

E.  R.  Kenzel,  deputy  governor,  entered  the 
bank  at  a  yearly  salary  of  $4,200  and  now  receives 
a  yearly  salary  of  $22,000,  or  an  increase  of  423 
per  cent. 

A.  W.  Gilbart,  controller  of  administrations, 
entered  the  bank  at  a  yearly  salary  of  $2,400  and 
now  receives  a  yearly  salary  of  $12,500,  or  an  in- 
crease of  420  per  cent. 

L.  R.  Rounds,  controller  of  accounts,  entered 
the  bank  at  a  yearly  salary  of  $2,400  and  now  re- 
ceives a  salary  of  $12,500,  an  increase  of  420  per 
cent. 


n 


The  Federal  Reserve  Monster 

Chas.  H.  Coe,  manager  of  the  check  depart- 
ment, entered  the  bank  at  a  yearly  salary  of  $1,500 
and  now  receives  a  yearly  salary  of  $7,200,  an 
increase  of  380  per  cent. 

W.  B.  Matteson  entered  the  bank  at  a  yearly 
salary  of  $2,400  and  now  receives  $10,000,  an 
increase  of  316  per  cent. 

J.  D.  Higgins,  controller  of  cash,  entered  the 
bank  at  a  yearly  salary  of  $3,000  and  now  receives 
a  yearly  salary  of  $12,000,  an  increase  of  300  per 
cent. 

S.  S.  Vansant,  manager  discount  department, 
entered  the  bank  at  a  yearly  salary  of  $1,500  and 
now  receives  a  yearly  salary  of  $5,000,  an  in- 
crease of  233  per  cent. 

R.  M.  Gidney,  controller  at  large,  entered  the 
bank  at  a  yearly  salary  of  $4,000  and  now  receives 
a  yearly  salary  of  $15,000,  or  an  increase  of  276 
per  cent. 

I.  W.  Waters,  manager  personal  service  de- 
partment, entered  the  bank  at  a  yearly  salary  of 
$2,250  and  now  receives  a  yearly  salary  of  $7,200, 
or  an  increase  of  220  per  cent. 

James  Rice,  manager  government  bond  depart- 
ment, entered  the  bank  at  a  yearly  salary  of  $1,800 
and  now  receives  a  yearly  salary  of  $5,500,  or  an 
increase  of  205  per  cent. 

L.  H.  Hendricks  entered  the  bank  on  a  yearly 
salary  of  $6,000  and  now  receives  a  yearly  sal- 
ary of  $18,000,  or  an  increase  of  200  per  cent. 

78 


The  Monster's  Expenses 

Incidentally  Benjamin  Strong,  the  governor  of 
the  New  York  Federal  Reserve  Bank,  has  had  his 
salary  increased  from  $30,000  per  year  to  $50,000 
per  year — more  than  six  times  the  pay  of  a  United 
States  Senator! 

Ask  any  corporate  manager,  any  practical 
banker,  or  any  efficiency  expert  if  they  permit,  or 
if  they  know  of  any  such  stupendous  salary  in- 
creases— increased  and  maintained  in  a  time  of 
general  disaster  and  enforced  economies.  If  this 
isn't  strutting  bureaucracy  running  amuck  with 
public  money,  what  is  it? 

Take  now  a  look  at  the  total  expense  account — 
which  you  are  helping  to  pay— of  the  Federal 
Reserve  System  for  the  year  1921.  It  amounted 
to  the  stupendous  sum  of  $36,066,065,  or  an  aver- 
age of  $3,005,500  for  each  one  of  the  twelve  re- 
gional satrapies !  You  can't  measure  it — ^because 
there  is  nowhere  on  earth  any  other  banking  ex- 
pense account  by  which  to  measure  it!  Like 
an  Andean  peak  it  towers  aloft  in  solitary  splen- 
dor. But  you  can  look  at  some  of  the  items.  Here 
they  are.  The  New  York  Federal  Reserve  Bank 
heads  the  list  of  extravagance  with  an  expense 
account  of  $8,167,780,  and  the  Minneapolis  Fed- 
eral Reserve  Bank  was  the  most  modest — and  not 
any  too  modest  at  that — with  an  expense  account 
of  $1,325,867.  It  cost  you  for  bank  officers'  sal- 
aries $2,383,994,  for  clerk  hire  $15,201,393,  for 
special  officers  and  watchmen  $789,879  and  for 

79 


The  Federal  Reserve  Monster 

"all  other"  $1,102,984.  What  that  "all  other" 
item  of  $1,102,984  really  is,  is  deep  buried  in  Fed- 
eral Reserve  archives.  When  you  get  through 
with  bank  officers,  bank  clerks,  special  officers 
and  watchmen,  you  would  think  that  included 
about  all  possible  bank  employees,  but  Federal 
Reserve  ingenuity  slips  over  $1,102,984  under  the 
cloak  of  "all  other !" 

It  cost  you  $7,750  for  Federal  Reserve  Gover- 
nors to  "confer,"  $4,443  for  Federal  Reserve 
Agents  to  "confer"  and  $10,522  for  the  Federal 
Advisory  Council — whatever  that  is — to  "confer." 
"Conferences" — in  bureaucracy — come  high,  don't 
they?  And  it  cost  you  $168,556  to  hold  directors' 
meetings  with  173  out  of  254  of  them  living  in 
the  same  town  where  the  bank  or  its  branch  is 
located.  Traveling  expenses  cost  you  $357,962 
— some  travelers  these  Federal  Reserve  tourists 
are! 

These  bureaucratic  "expenses"  of  a  parasitical 
system  hooked  on  to  your  banking  system  are 
stupendous,  titanic,  gigantic!  They  are  inde- 
fensible— and  undefended  too — from  any  possible 
standpoint  of  efficiency,  economy  or  necessity. 
Look  them  over  in  cold  blood.  Look  over  the 
stupendous  salary  raises — both  in  amounts  and 
in  percentages — in  the  New  York  Federal  Re- 
serve satrapy  and  compare  them  with  any  private 
business  on  earth.  Private  stockholders — not 
commandeered  by  law  and  not  chained  by  act  of 

80 


The  Monster's  Expenses 

Congress — would  drive  out  any  such  maladminis- 
tration of  extravagance.    You  know  it. 

Who  is  responsible — directly,  morally  and  le- 
gally responsible — for  this  orgy  of  Federal  Re- 
serve extravagance  absolutely  unequaled  in  the 
history  of  the  world  or  in  the  history  of  banking? 
Why,  the  Federal  Reserve  Board  at  Washing- 
ton is  responsible.  What  makes  them  respon- 
sible? Here  is  the  exact  language.  Read  it. 
"Any  compensation  that  may  be  provided  by 
Boards  of  Directors  of  Federal  Reserve  Banks 
for  directors,  officers  or  employees  shall  be  sub- 
ject to  the  approval  of  the  Federal  Reserve 
Board."  That's  plain,  isn't  it?  If  the  Federal 
Reserve  Board  at  Washington  doesn't  "approve" 
these  huge  compensations,  they  can  not  be  paid. 
It  is  the  Federal  Reserve  Board  at  Washington 
— and  no  other  authority  on  earth — which  is  re- 
sponsible for  the  greatest  orgy  of  expense  ever 
strapped  on  the  backs  of  staggering  business. 
It's  their  ukase,  it's  their  decree,  it's  their  order 
which  registers  these  titanic  expenses — every 
penny  of  which  is  wrung  from  American  pro- 
ducers of  wealth !  And  they  are  political  appoin- 
tees— not  elected,  but  appointed.  The  Federal 
Reserve  Board  at  Washington  really  wields  a 
power  greater  than  any  sceptered  monarch  ever 
swayed.  At  their  nod  or  at  their  beck  every 
Federal  Reserve  employee  holds  his  job,  for  if 
they  don't  "approve"  his  "compensation"  he  can't 

81 


The  Federal  Reserve  Monster 

attach  his  lips  to  the  public  teat  with  its  golden 
flow  of  "compensation !"  It's  the  Federal  Reserve 
Board  at  Washington — unsupervised  and  with 
legally  limitless  power — which  is  responsible  for 
this  Federal  Reserve  expense  orgy. 


82 


CHAPTER  XII 

WHAT  THE  MONSTER  DOES  WITH  ITS  LOOT 

HIS  chapter  is  going  to  be  like  a  tack — 
short  but  pointed.  Federal  Reserve  apol- 
ogists— on  and  off  the  floor  of  Con- 
gress— when  driven  into  their  last  retreat  always 
take  their  final  stand  and  make  their  last  play  in 
the  "franchise  tax"  stronghold.  Their  assertion 
is  in  effect  that  no  matter  what  may  be  the 
abuses  and  sandbaggeries  and  extravagances  of 
this  system  the  "big  money"  gets  back  to  the 
Government  in  the  shape  of  the  mythical  "fran- 
chise tax."  Here  is  where  you  get  the  facts  pre- 
cisely as  they  are.  What  became  of  the  lootage 
of  the  Federal  Reserve  System  for  the  year  1921 
and  what  proportion  of  it  did  your  Government 
get? 

The  gross  takings  of  the  Federal  Reserve  Sys- 
tem— extracted  from  American  production  and 
industry— amounted  to  $122,864,605.  That's 
what  it  euphoniously  calls  its  "earnings."  First 
there  came  out  the  gigantic  expense  account,  of 
which  you  have  already  read,  of  $36,066,065,  leav- 

83 


The  Federal  Reserve  Monster 

ing  $86,798,540,  which  the  monster  calls  its 
''current  net  earnings."  There  is  then  added  to 
this  $360,856,  which  in  previous  years  had  been 
deducted  for  "depreciation  on  U.  S.  Bonds," 
which  didn't  finally  "depreciate."  There  is  also 
added  $131,536  under  an  "all  other"  blanket—- 
much  favored  in  the  Federal  Reserve  System  vo- 
cabulary. You  now  have  $87,290,932  "current 
net  earnings."  From  this  are  deducted  $1,251,675 
for  "depreciation  allowance  on  bank  premises;" 
$2,861,500  for  "reserve  for  possible  losses"  which 
probably  won't  occur;  $400,000  "reserve  for  self 
insurance" — whatever  that  is ;  $49,295  "reserve  for 
depreciation  on  U.  S.  Bonds" — which  probably 
won't  depreciate  now  that  they  have  been  sand- 
bagged out  of  the  hands  of  the  original  purchas- 
ers; $641,237  sandbagged  out  under  the  favorite 
"all  other"  Federal  Reserve  blanket.  Here  are  $5,- 
203,707  gone  out  in  mere  bookkeeping  entries 
with  the  real  money  which  these  entries  represent 
still  in  Federal  Reserve  custody.  This  leaves 
$82,087,225.  From  this  is  deducted  a  petty  $6,- 
119,673  dividends  paid  on  the  capital  comman- 
deered. From  this  is  deducted  $15,993,086  to  be 
added  to  the  already  swollen  Federal  Reserve 
Surplus  Account.  And  there  is  left  just  $59,974,- 
466  for  the  much  touted  franchise  tax. 

If  you  have  followed  thes  figures  you  have 
seen  that  in  order  to  get  a  petty  "franchise  tax" 
of  $59,974,466  into  the  hands  of  your  Govern- 

84 


What  Monster  Does  With  Loot 

ment,  it  cost  you  just  exactly  $62,890,139  to  col- 
lect it — the  precise  difference  between  the  Fed- 
eral Reserve  "earnings"  and  the  amount  paid  in- 
to the  Government.  Ask  yourself,  is  a  tax  of  $59,- 
974,466,  which  costs  $62,896,139  to  collect  a 
"painless  tax?"  Is  there  any  more  painful  tax 
levied  on  American  industry?  That's  what  this 
ballyhooed  "franchise  tax"  amounted  to  in  1921 
and  all  it  amounted  to— a  tax  of  $59,974,466, 
which  cost  $62,890,139  to  collect! 


85 


CHAPTER  XIII 

THE   CAMOUFLAGE  OF  THE  MONSTER 

ON'T  check  your  brains  at  the  portals 
of  the  Federal  Reserve  "Bunking"  Sys- 
tem. That  is  what  its  touters  and  bal- 
lyhooers  want  you  to  do.  Federal  Reserve  bu- 
reaucrats and  its  beneficiaries  and  its  hirelings 
c'nd  an  artfully  subsidized  press  have  really  put 
the  "prop''  in  propaganda. 

They  would  have  you  believe — and  literally 
hundreds  of  columns  of  inspired  writings  have 
been  used  to  make  you  believe — that  the  Federal 
Reserve  System  is  composed  of  twelve  indepen- 
dent Federal  Reserve  Banks,  each  one  especially 
devoted  to  fostering  industry  in  its  own  regional 
territory. 

Such  is  not  the  fact.  The  fact  is  that  the  Fed- 
eral Reserve  System  is  in  truth  a  huge  Central 
Bank,  managed,  manipulated,  directed  and  opera- 
ted from  Washington  by  the  Federal  Reserve 
Board.  There  sits  the  spider  and  there  the  web 
is  woven — spreading  all  over  the  U.  S.  A. — in^ 
which  are  enmeshed  the  victims. 

86 


Camouflage  of  the  Monster 

You  can  read — if  you  want  to  waste  your  time 
— oodles  of  language  about  how  the  Boards  of  Di- 
rectors of  these  twelve  Federal  Reserve  Banks  are 
seated  in  office  and  how  part  of  them  are  elected 
by  member  banks  and  how  part  of  them  are  ap- 
pointed by  the  Federal  Reserve  Board.  You  can 
— if  you  want  to  waste  more  of  your  time — ab- 
sorb messes  of  artfully  worded  verbiage  about 
the  duties  of  the  Boards  of  Directors.  But  it's 
all  "gammon  and  spinach,"  it's  all  artful  camou- 
flage. The  real  government  of  the  Federal  Reserve 
Banking  System  and  of  its  twelve  Federal  Reserve 
Banks  and  branches  is  in  the  absolute  dictatorial 
control  of  the  Federal  Reserve  Board  at  Washing- 
ton. It  is  all  contained  in  one  little  joker  of  just 
thirty  words.  Here  it  is.  Read  it.  "Any  compensa- 
tion that  m^y  be  provided  by  Boards  of  Directors  of 
Federal  Reserve  Banks  for  directors,  oificers  or 
employees  shall  be  subject  to  the  approval  of  the 
Federal  Reserve  Board."  In  every  one  of  the 
twelve  Federal  Banks  every  director,  every  Gov- 
ernor, every  one  of  the  Deputy  Governors,  Fed- 
eral Reserve  Agents,  Cashiers,  Assistant  Cash- 
iers, Controllers,  Secretary,  Counsel,  Assistant 
Counsel,  Clerks,  Stenographers,  Messengers  and 
Watchmen — in  short,  the  whole  horde  of  Federal 
Reserve  bureaucratic  parasites — are  subject  to 
the  approval  of  the  Federal  Reserve  Board  at 
Washington  because  their  compensation  is  subject 
to  the  approved  of  the  Federal  Reserve  Board.    You 

87 


The  Federal  Reserve  Monster 

know  that  the  hands  that  hold  the  money  rule 
the  enterprise.  You  know  that  approval  or  dis- 
approval of  compensation  is  in  effect  "hiring  and 
firing."  You  know  that  "approval  of  compen- 
sation" is  simply  a  euphonious  bit  of  language 
or  smoke  screen  behind  which  really  sits  an  en- 
throned autocracy.  No  matter  how  many  "con- 
ferences" are  held  between  Governors  of  Federal 
Reserve  Banks,  between  Federal  Reserve  Agents 
and  with  the  Federal  Advisory  Council — "confer- 
ences" which  during  1921  cost  you  $22,716 — the 
Federal  Reserve  Board  at  Washington  is  the  su- 
preme and  final  dictator  of  the  personnel  and 
of  the  pay  of  its  10,313  employees  and  of  its  231 
officers.  The  Federal  Reserve  Board  as  to  the 
compensation  of  this  horde — and  hence  as  to  its 
personnel — is  an  absolute  autocracy  from  whose 
order  there  is  no  appeal !  It  draws  its  expense  ac- 
count from  a  practically  bottomless  treasury 
without  let,  hindrance,  supervision  or  veto! 
Kaiserdom  and  Czardom  in  their  palmiest  days 
drew  from  no  such  lake  of  liquid  gold  as  draws 
the  Federal  Reserve  Board  at  Washington.  Set 
that  down  on  your  mental  tablets  and  proceed  to 
the  next  camouflage  station. 

Here  it  is.  Federal  Reserve  propaganda — with 
a  practical  limitless  expense  account  to  further 
it — would  have  you  believe  that  its  favored  coterie 
of  231  officials  are  top  notch  bankers.  Take  a 
look  at  this  as  it  really  is.    The  bankers  whom 

88 


Camouflage  of  the  Monster 

you  know  and  with  whom  you  do  your  business 
and  to  whom  you  entrust  your  money  and  from 
whom  you  borrow  your  money  have  taken  their 
own  money  and  the  money  of  their  associates  and 
contributed  the  capital  of  their  banks  and  put  it 
at  risk.  They  wager  their  own  money  that  they 
are  good  bankers.  They  have  initiative  and  con- 
fidence in  their  own  ability  and  they  prove  that 
they  have  by  putting  up  their  own  money  before 
they  ask  you  to  entrust  yours  to  their  keeping. 
The  officers  of  the  Federal  Reserve  Banks  don't 
put  up  a  copper  cent,  a  plugged  nickel,  or  a  thin 
dime  of  capital.  The  capital  which  they  manipu- 
late is  commandeered  by  law  for  their  use  at  a 
petty  six  per  cent  rate.  They  may  charge — and 
they  have  charged — as  high  as  eighty-seven  per 
cent  in  one  of  their  Shylockeries,  but  six  per  cent 
is  all  that  those  who  furnish  the  capital  can  claim. 
In  1919  the  Federal  Reserve  System  sandbagged 
out  of  other  people's  money  a  profit  of  110  per 
cent,  in  1920  160  per  cent  and  in  1921  79  per  cent. 
In  1919  its  stockholders  received  104  per  cent  less 
than  their  capital  really  earned,  in  1920  154  per 
cent  less  than  their  capital  really  earned,  and  in 
1921  73  per  cent  less  than  their  capital  really 
earned.  For  the  three  years  of  1919,  1920  and 
1921  the  average  net  profits  of  the  Federal  Re- 
serve System  were  116  per  cent  and  the  real 
owners  of  the  capital  were  gypped  legally — but 
none  the  less  gypped — out  of  an  average  of  110 

89 


The  Federal  Reserve  Monster 

per  cent  for  each  of  those  three  years.  Do  you 
suppose  that  officers  of  any  bank  not  legally  so 
buttressed  could  "get  away"  with  any  such  prop- 
osition ?  You  know  they  couldn't — and  hold  their 
jobs.  No  body  of  stockholders  in  the  U.  S.  A., 
unless  legally  chained,  would  endure  a  profit  of 
116  per  cent  and  a  dividend  of  but  6  per  cent! 
And  no  bank  officers  in  the  U.  S.  A.,  unless  le- 
gally permitted,  would  attempt  to  "put  over"  any 
such  proposition.  You  know  it.  Peg  that  and 
proceed  to  the  next  proposition. 

What  is  the  absolute,  final  and  unquestionable 
test  of  a  good  banker,  a  real  top  notcher  in  his 
business?  It  is  the  volume  of  deposits  which  he 
attracts.  That  is  the  ultimate  test  of  his  ability 
and  integrity — the  confidence  he  inspires  in  his 
institution  as  measured  by  the  volume  of  money 
entrusted  to  it!  That  volume  of  deposits  must 
be  obtained,  retained  and  increased  in  the  face 
of  the  hottest  kind  of  hot  competition.  It  is  the 
absolute  ability  and  integrity  meter  of  a  success- 
ful banker.  There  is  no  other.  Are  these  strut- 
ting, preening,  vociferating  and  vociferous  Feder- 
al Reserve  bankers  measured — or  measurable — 
by  that  standard?  Do  they  battle  for  their  de- 
posits and  by  those  deposits  and  the  volume  of 
them  win  their  spurs?  They  do  not.  Their  mass 
of  deposits — the  largest  on  earth — are  dumped 
into  their  banks  by  law,  conscripted  into  their 
coffers.    They  are  not  won  in  competition.    Fed- 

90 


Camouflage  of  the  Monster 

eral  Reserve  bankers  don't  prove  their  ability  by 
competition — they  smugly  admit  it.  At  this  writ- 
ing over  $1,800,000,000  of  deposits  are  in  their 
coflfers,  conscripted  there  as  were  soldiers  in  the 
World  War  by  law ! 

And  not  only  that,  but  that  vast  mass  of  de- 
posits— the  hugest  on  earth — is  handed  to  them 
free  of  interest  charge.  All  other  banks  in  large 
American  cities  not  only  compete  with  each  other 
for  the  deposits  of  country  banks,  but  pay  in- 
terest on  them  at  a  minimum  of  2  per  cent  per 
annum.  Federal  Reserve  bankers  pay  no  interest 
— not  even  to  the  Government.  If  a  National 
Bank  wants  Government  deposits  it  must  put  up 
the  unquestioned  security  to  get  them  and  then 
must  pay  interest  on  them,  but  Federal  Reserve 
bankers  do  neither!  Not  much  competition  for 
Federal  Reserve  bankers  there,  is  there?  Peg 
that  proposition  and  look  at  the  next  one. 

Here  it  is.  The  loans  of  a  bank  are  the  life  of 
a  bank.  From  the  interest  upon  them  comes  prac- 
tically the  sole  earnings  of  a  bank  and  upon  their 
repayment  depends  the  solvency  of  a  bank.  The 
credit  department  of  a  bank  is  its  solar  plexus. 
Loans  must  be  successfully  made  to  men  engaged 
in  every  variety  of  industry,  some  secured,  some 
unsecured  and  in  amounts  varying  from  a  few 
hundreds  of  dollars  to  hundreds  of  thousands  of 
dollars.  In  May,  1922,  the  loans  and  discounts 
of  the  National  City  Bank  of  New  York  amounted 

91 


The  Federal  Reserve  Monster 

to  $506,840,494~larger  by  over  $200,000,000  than 
all  the  "earning  assets"  of  the  Federal  Reserve 
Bank  of  New  York.  But  there  is  a  greater  dif- 
ference than  even  in  these  figures  and  here  it  is. 
The  bulk  of  the  loans  of  the  Federal  Reserve  Sys- 
tem are  made  to  its  member  banks  and  require 
very  slight,  if  any,  credit  ability.  The  bulk  of  the 
people  in  the  U.  S.  A.  are  loaning  money  to  banks 
— when  they  make  their  deposits — without  in- 
terest and  unsecured,  while  the  Federal  Reserve 
System  is  engaged  largely  in  making  loans  to 
banks  at  rates  up  to  87  per  cent  and  mostly  se- 
cured at  that !  In  other  words,  what  the  bulk  of 
the  people  of  the  U.  S.  A.  do  who  are  bank  de- 
positors is  to  loan  banks  money  for  nothing  or 
at  a  very  low  rate  of  interest  and  unsecured, 
while  the  Federal  Reserve  System  loans  the  banks 
money  often  at  altitudinous  rates  and  often  se- 
cured at  that !  Or  to  put  it  another  way,  Federal 
Reserve  bureaucracy  draws  fabulous  profits  for 
doing  practically  for  the  banks  what  the  people 
of  the  U.  S.  A.  are  daily  doing  for  nothing! 

Sum  up  some  of  these  differences  between 
National  and  State  Banks  and  Federal  Reserve 
parasitism. 

National  and  State  bankers  put  up  their  own 
capital  and  risk  their  own  money.  Federal  Re- 
serve bankers  commandeer  their  capital  and  risk 
not  a  penny  of  their  own. 

National  bankers  make  practically  over  a  large 
term  of  years  about  12  per  cent  net  profits  and 

92 


Camouflage  of  the  Monster 

P'ederal  Reserve  bankers  make  the  most  fabulous 
profits  ever  registered  on  bank  ledgers — during 
the  three  years  last  past  an  average  of  116  per 
cent. 

National  and  State  bankers  earn  their  deposits 
in  the  hottest  kind  of  competition.  Federal  Re- 
serve bankers  conscript  their  deposits — without 
a  scintilla  of  effort. 

National  and  State  bankers  pay  interest  to  the 
Government  for  Government  deposits  and  give 
security  besides.  Federal  Reserve  bankers  pay 
no  interest  and  give  no  security  for  Government 
deposits.     • 

National  and  State  bankers  pay  interest  upon 
deposits  of  other  banks.  Federal  Reserve  bankers 
do  not  pay  any  interest. 

The  capital  of  National  Banks  is  commandeer- 
ed into  the  capital  of  Federal  Reserve  Banks  at 
a  petty  six  per  cent  and  their  reserve  deposits 
are  conscripted  at  no  per  cent  and  then  they  are 
graciously  permitted  to  borrow  their  own  money 
at  altitudinous  rates ! 

Which  are  really  the  better  and  more  necessary 
bankers — the  National  and  State  bankers  or  the 
Federal  Reserve  System  of  parasitical  camou- 
flage? Which  is  the  more  necessary,  the  National 
and  State  bankers  close  to  the  people,  bearing  the 
risk  at  petty  profits  or  the  Federal  Reserve  bank- 
ers distant  from  the  people  bearing  practically  no 


93 


The  Federal  Reserve  Monster 

risk  but  reaping  profits  which  would  make  Shy- 
lock  frenzy  with  envy? 

Isn't  the  Federal  Reserve  System  as  now  con- 
stituted and  as  now  administered  really  a  Fed- 
eral Reserve  "Bunking"  System  astutely  camou- 
flaged, smoke  screened  by  artful  propaganda  and 
by  legalized  privilege  and  favoritism  ?  Isn't  it  in 
truth  and  in  fact  a  commandeering  and  conscript- 
ing monster  of  finance,  politically  manipulated, 
with  the  most  extravagant  salaries,  buildings,  ex- 
pense accounts  and  the  most  fabulous  profits  in 
all  human  history? 


94 


CHAPTER  XIV 
FINAL  VOLLEY  AT  THE  MONSTER 


ET  right  down  to  brass  tacks  and  ask 
yourself  these  questions: 


No.  1.  Do  you  want  a  Federal  Reserve  System 
managed  and  manipulated  from  Washington  by 
the  Federal  Reserve  Board  composed  of  political 
appointees  subject  to  no  control,  supervision  nor 
oversight  and  in  effect  a  mammoth  Central  Bank? 

No.  2.  Do  you  want  capital  commandeered 
at  6  per  cent  by  the  use  of  which  are  wrung  out 
profits  as  high  as  160  per  cent? 

No.  3.  Do  you  want  deposits — over  $1,800,- 
000,000 — conscripted  at  no  per  cent  loaned  out  at 
interest  charges  as  high  as  87  per  cent? 

No.  4.  Do  you  want  to  permit  or  allow  the 
coercion  or  sandbaggery  of  non-member  State 
banks  by  the  Federal  Reserve  System  in  its  pi- 
ratical attempts  to  get  its  checks  collected  for 
nothing?  The  Supreme  Court  of  the  United 
States  frowns  on  such  sandbaggery.  Do  you 
favor  it? 

95 


The  Federal  Reserve  Monster 

No.  5.  Do  you  want  such  titanic  expense  ac- 
counts and  such  altitudinous  salaries  paid  to  fa- 
vored bank  officers? 

No.  6.  Do  you  want  such  an  orgy  of  squan- 
dermania  in  the  erection  and  equipment  of  sump- 
tuous palaces  of  pillage  with  its  auditoriums  and 
club  rooms  and  gymnasium  and  restaurant  attach- 
ments? 

No.  7.  Do  you  want  to  witness,  or  be  victim- 
ized by,  Debacles  of  Drastic  Deflation  with  all 
the  destructions,  miseries  and  disasters  in  their 
wake? 

No.  8.  Do  you  want  such  a  Partiality  of 
Pillage  whereby  parasitical  speculation  is  coddled 
and  the  necessary  production  of  real  wealth  is 
throttled? 

No.  9.  Do  you  want  such  a  Croesus-like 
hoarding  of  gold— now  over  $3,000,000,000— 
which  menaces  the  world  and  which  deprives  you 
of  even  the  sight  of  your  own  money?  And  do 
you  like  a  gold  basis  buried  so  deep  that  you  can't 
even  see,  nor  get,  a  stiver  of  it? 

No.  10.  Do  you  want  a  system  where  bank 
credits  and  bank  currency — the  very  life  blood  of 
production  and  of  commerce — can  be  arbitrarily 
contracted  at  the  mere  whim  of  a  coterie  of  finan- 
cial despots? 

No.  11.  Do  you  want  pawnbrokering  interest 
rates  charged  and  Shylockery  practiced  under 
the  aegis  of  your  flag? 

96 


Final  Volley  at  the  Monster 

And  if  you  do  want  any  or  all  of  these  things, 
do  you  want  the  financial  destinies  of  your  estate, 
of  your  children  or  of  your  inheritors  dependent 
on  the  whim — or  mayhap  on  the  interests — of 
what  is  in  reality  earth's  most  autocratic  Money- 
Bund? 

Do  you  want  the  prosperity  or  adversity  of 
the  U.  S.  A. — the  greatest  Nation  under  Jehov- 
ah's canopy — summoned  at  the  beck  and  call  of 
the  real  Invisible  Empire? 

You  know  that  when  you  hand  over  the  finan- 
cial government  of  a  Nation  to  a  parasitical 
coterie  of  men  you  hand  over  to  them  the  real 
Government  of  a  nation  and,  knowing  that,  do 
you  want  this  autocratic  Federal  Reserve  Sys- 
tem continued  as  it  is?  In  other  words,  do  you 
want  this  parasitical  Federal  Reserve  System — 
remote  from  the  producers  of  real  wealth — purely 
a  child  of  astutely  lobbied  law  in  the  interests 
of  a  few  paltry  "kings  of  finance"  to  really  govern 
the  United  States  by  governing  its  money? 

Do  you  want  the  very  height  and  apex  of 
Special  Privilege  enthroned  and  sceptered  gov- 
erning your  Republic?  Do  you  want  to  continue 
to  be  a  Republic  in  name  only,  while  its  real  des- 
tinies— through  a  money  monopoly — are  guided 
by  coteries  of  Special  Privilegists  strutting  under 
your  laws,  housed  in  palaces  of  splendor  paid  for 
by  you  and  extracting  fabulous  salaries  from  your 
toil?    Were  Washington,  Jefferson,  Jackson  and 

97 


The  Federal  Reserve  Monster 

Lincoln  all  wrong  when  they  warned  you  against 
special  privileges  and  the  encroachments  of 
massed  wealth?  Do  you  want  unelected  and  po- 
litically appointed  satraps  parceling  out  and  ad- 
ministering your  Nation  in  twelve  satrapies?  Do 
you  want  your  Government  to  continue  its  abdi- 
cation of  finance  and  to  continue  to  be  but  a 
mere  puppet  in  the  hands  of  an  organized  Money- 
Bund? 

Oughtn't  this  Federal  Reserve  "Bunking" 
System — which  has  the  U.  S.  A.  buncoed  and 
chloroformed  out  of  its  financial  independence — 
to  be  curbed,  humanized,  restrained,  limited 
and  governed  instead  of  devouring  the  substance 
of  its  creators,  the  people?  When  the  misbranded 
"emancipator  of  credit"  becomes  the  destroyer 
of  credit,  oughtn't  the  destroyed  to  emancipate 
themselves?  When  an  arrogant  creature  over- 
rides and  oppresses  its  creators,  oughtn't  it  to 
be  sternly  regulated  or  destroyed?"  When  you 
were  befooled  into  creating  the  Federal  Reserve 
System,  did  you  create  a  Frankenstein  monster 
for  your  own  industrial  destruction? 

Don't  you  want  this  parasite  curbed  ere  it 
throttles  to  death  the  sturdy  tree  of  American 
production  about  which  it  has  entwined  its 
throttling  tentacles?    Really,  don't  you? 

End 


98 


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